The General Department of Taxation ("GDT") published Instruction No. 18574 GDT on June 17, 2025, to offer formal guidelines regarding the tax treatment of share premiums. This directive addresses persistent business worries about the unpredictability of income tax effects associated with share premium transactions.

According to this directive, a share premium is the sum that a business receives when new shares are issued, above the par value of the shares. The GDT confirms that, in accordance with Cambodian tax legislation, this sum is not taxable income but rather a capital contribution made by shareholders to the enterprise's equity. With this explanation, revenue from business operations is distinguished from shareholder investment.

However, the instruction lays out the following compliance conditions to guarantee that the share premium is regarded as non-taxable income:

• The entire amount of the share premium and capital must be invested in the business.
• The business's financial records must appropriately reflect these sums.
• The subscription agreements may be among the legitimate and comprehensive supporting documentation for the submissions.

According to the income tax regulations, the GDT may treat the growth in the owner's equity account as taxable income if any of these requirements are not met.