LAOSTAX BOOKLET
2022 - 2023

Get to the point.

© VDB Loi Co., Ltd. 2022
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted
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Published by VDB Loi Co., Ltd.
September 2022

Disclaimer: All information is considered correct as of the publication date in accordance with the
tax laws; however it is not intended to be relied upon. For the most up-to-date information, pleasecontact one of our advisers or visit our website at www.vdb-loi.com.

Contents
Quick Reference Tax Rate Tables....................................................... iTax on Income.................................................................................... i
Non-Residents and Compulsory Profit Tax Withholding ...................ii
Microenterprises................................................................................ii
Monthly personal Income Tax............................................................ii
Other Income Taxes..........................................................................iii
Value Added Tax...............................................................................iii
Excise Tax..........................................................................................iv
Customs Duty...................................................................................vii
Abbreviations................................................................................viii
Tax Registration............................................................................... 1
Tax Audits........................................................................................ 2
General tax audit process................................................................. 2
VAT audit process.............................................................................. 2
Annual audit of personal income tax................................................ 2
Profit Tax (corporate income tax)..................................................... 4
Residency.......................................................................................... 4
Rates................................................................................................. 4
Computation..................................................................................... 4
Deductible expenses and other tax adjustments.............................. 4
Depreciation..................................................................................... 6
Tax loss utilization............................................................................. 6
Filing and payment........................................................................... 7
PT of non-residents........................................................................... 7
Microenterprises............................................................................. 8
Income Tax...................................................................................... 9
Overview........................................................................................... 9
Rates............................................................................................... 10
Computation, filing, and payment.................................................. 11
Value Added Tax............................................................................ 12
Overview......................................................................................... 12
Scope of application....................................................................... 12
Non-taxable goods and services..................................................... 12
Registration.................................................................................... 13

Rates of tax..................................................................................... 13
Basics of taxation............................................................................ 13
Excise Tax...................................................................................... 14
Scope.............................................................................................. 14
Rates............................................................................................... 14
Basics of taxation............................................................................ 14
Customs Duty................................................................................ 15
Import duty..................................................................................... 15
Export duty..................................................................................... 15
Double Taxation Agreements......................................................... 16
Transfer Pricing.............................................................................. 17
Investment Project Incentives........................................................ 18
Administration.............................................................................. 19
Tax payment plan........................................................................... 19
Accounting and invoicing................................................................ 19
Refunds........................................................................................... 19
Tax due dates.................................................................................. 19
Penalties....................................................................................... 20

Quick Reference Tax Rate Tables
Tax on Income
TypeStandard rate
Tobacco companies
Microenterprises1 that havevolun-tarily registered in the VAT
systemSmall-scale entities2 that have
newly registered in the VAT system
Medium-scale entities3 that have
newly registered in the VAT system
Human resource development
and certain medical activities
Activities using new innovativetechnology, and those that areenvironmentally friendly, use
natural resources frugally, and use
clean energy for their production
Company listed on the Lao stock
exchange

TOI Rate
20%
22%
0.1%

3% (for the first three years) then 20%
5% (for the first three years) then 20%
5% (af-ter the end of the PT exemption peri-od as specified in the
In-vestment Promo-tion Law)
7%
(after the end of the PT exemption
period as specified in the Investment
Promotion Law)
13% (for the first four years) then 20%

1

Microenterprises are entities that have 1-5 staff, total assets not exceeding LAK200
million, and annual revenue of less than LAK400 million.

2

Small-scale entities are entities that have 6-50 staff, total assets not exceeding LAK1.5
billion, and annual revenue not exceeding LAK3 billion.

3

Medium-scale entities are entities that have 51-99 staff, total assets not exceeding LAK6
billion, and annual revenue not exceeding LAK6 billion.

Page

i

Non-Residents and Compulsory Profit Tax Withholding
Income source
Agricultural and handicraft activities
Industrial and other processing industry
activ-ities
Trading/commerce and service activities
Hydropower and mining activities

Gross profit
ratesProfit tax
deemed rates

7%
10%

1.4%
2%

15%
30%

3%
6%

Microenterprises
Lump-sum tax rates

Annual revenue(LAK)

Manufacturing

Less than 50,000,000
50,000,001 – 400,000,000

Exempt1%

TradingServices

Exempt2%

Exempt3%

Incometax ateach level(LAK)

Cumulative
income tax(LAK)Monthly personal Income Tax
Level
1
2
3
4
5
6

Page ii

Taxablesalary ateach level(LAK)
1,300,000
and below
1,300,001 –5,000,000
5,000,001 –15,000,000
15,000,001 –25,000,000
25,000,001 –
65,000,000
Above
65,000,000

Basis ofcalculation
(LAK)

Tax
rate

1,300,000

0%

0

0

2,000,000

5%

185,000

185,000

3,000,000

10%

1,000,000

1,185,000

6,000,000

15%

1,500,000

2,685,000

12,000,000

20%

8,000,000

10,685,00025%Other Income Taxes(not an exhaustive list)

Type of income

Individuals
Resident

Agriculture land transfer
Share transfer
Land/house/building transfer

1%
2%
2%

Online trading
Lottery winnings
Intellectual property
Commissions
Consultancy/other service fees
Dividends
Non-banking loan interest
Guarantee fees
Rentals

2%
5%
5%
5%
5%
10%
10%
10%
10%

Non-resident
N/A
2%
10%
(house/building)
?
5%
5%
5%
5%
10%
10%
?
10%

Legal
entities
N/A
2%
N/A
N/A
N/A
5%
N/A
N/A
10%
10%
N/A
N/A

Value Added Tax
Type of supply
•
•
•
•
•
•

Import of goods
Import and supplies of minerals in the domestic market
Electricity distributed to domestic users
Domestic goods and services
Export of goods
Export of processed natural resources

Rate
7%

0%

Page iii

Excise Tax
Type of good

Rate

Fuel:
•
•
•
•
•

Gasoline (super)
Gasoline (normal)
DieselJet fuel
Lubricants, hydraulic oil, grease, and brake oil

40%
31%
21%
8%
5%

• Export of goods• Export of processed natural resourcesType of good
Vehicles:1
Gas- or diesel-powered motorcycles• With engine volume of 110 cc and lower• With engine volume of 111-150 cc• With engine volume of 151-200 cc• With engine volume of 201-250 cc• With engine volume of 251-500 cc• With engine volume of 501-800 cc• With engine volume of 801 cc or more
2
Gas- or diesel-powered transport vehicles:• With engine volume of 1,000 cc and lower• With engine volume of 1,001-1,600 cc• With engine volume of 1,601-2,000 cc• With engine volume of 2,001-2,500 cc• With engine volume of 2,501-3,000 cc• With engine volume of 3,001-4,000 cc• With engine volume of 4,001-5,000 cc• With engine volume of 5,001 cc or more
3
Hybrid transport vehicles

Page iv

0%

Rates
CBU

CKD

IKD

10%
20%
28%
39%
75%
100%
110%

6%
3%
Motorcycles
over 110 cc
are charged
for at their
CBU rates.

26%
31%
36%
41%
52%
77%
92%
102%
50% of the rates
charged in No. 2 above.

Type of good
4
5

Electric passenger vehicles
Two-door and two-and-a-half door SUVs:• Gas- or diesel-powered• Electric-powered6
Small passenger and transport vehicles• Gas- or diesel-powered• Electric-powered
7
Medium passenger and transport vehicles• Gas- or diesel-powered• Electric-powered8
Large passenger and transport vehicles• Gas- or diesel-powered• Electric-powered
Refrigerated vans, trucks transporting liquids,
gas, cement, or fuel, water vehicles, cranes, forklift
trucks, cement mixers, waste suction vehicles, allkinds of spraying vehicles, and camper vans
Trucks, articulated trucks, and semi-articulated
trucksGolf carts and vehicles used on golf courses
Sightseeing passenger cars
ATVs and Gokarts
Cars that use fuel oil produced or assembled in adomestic factory

Rates
CBU

CKD

IKD

3%
16%
3%
11%
3%
9%
3%
5%
3%
10%

5%
15%
5%
25%
5%

Type of good

3%

Rate

Imported parts (not available in a Lao factory) for assemblyand spare parts:• Motorcycles
6%• Passenger and transport vehicles
11%

Page v

Type of good
Accessories for vehicles:• Sound systems• Decorative accessories
Whiskey and alcoholic beverages:• Alcohol content of 10% or below• Alcohol content of over 10% to 23%• Alcohol content of over 23%
Beer:• Alcohol content of 0.5% or below• Alcohol content of over 0.5%
Tobacco:• Cigars, cigarettes in packages and other form
• Shredded tobacco
Gas for vehicles
Ready-made drinks:• Soft drinks, sodas, mineral water, fruit juices, and othersimilar drinks• Stimulant drinks
Crystal items or crystal adornments
Carpets made from wool and animal parts
Perfumes and cosmetics
Playing cards and gambling materials if author-ized by therelevant sectors
Traditional rockets, fireworks, firecrackers if authorized by
the relevant sectors
Speedboats, yachts, motorboats, including their spare parts
and accessories
Satellite television signal receivers
Audio-video players, cameras, telephones, audio-video
recorders, musical instruments, including their components
and accessories
Aerial drones, aerial cameras, parachutes and paragliders,and small jet engines
Page vi

Rate
25%
20%
62%
70%
80%
20%
60%
57%
42%
10%
7%
12%
25%
20%
25%
100%
85%
25%
15%
15%

25%

Type of goodRate

Billiard tables, snooker tables, bowling equipment, football 35%
playing tables
All kinds of game players
Special rate
based on theregulation
Type of service
Entertainment: Nightclubs, discotheques kara-oke
Bowling services
Beauty services
Use of services for mobile phones, digital tele-vision,
cable televisionInternet services
Golfing services
Lottery services
Casino services, poker machines, and all kinds ofgame players
Motor racing, horse racing, and cockfighting
Ballooning, parachuting and paragliding, and aerial
photography services

Rate
40%
24%
13%
5%
2%
0%
(FY2022) (FY2023)
25%
30%
Special rate basedon the regulation
30%
12%

Customs Duty
Description
Import duty:• From ASEAN countries• Passenger and transport vehicles
Export duty:• Standard rate
• Specific rates for specific products

Rate
0 to 30%
Variable
0%5% to 40%

Page vii

Abbreviations
Term
ASEAN
CBU
CGT
CKD
DTA
IKD
NBV
PE
PIT
PT
SSO
ST
TIN
VAT
WHT

Page viii

Definition
Association of Southeast Asian Nations
Completely Built Up
Capital Gains Tax
Completely Knocked Down
Double Taxation Agreement
Incompletely Knocked Down
Net Book Value
Permanent Establishment
Personal Income Tax
Profit Tax
Social Security Organization
Specific Tax on Certain Merchandise and Services
Tax Identification Number
Value Added Tax
Withholding Tax

Tax Registration
Currently, there are three main tax registration database systems in Laos: (1)entities having annual revenue of LAK400 million or more must be registeredunder the value added tax (“VAT”) system; (2) entities with annual revenueof less than LAK400 million may voluntarily register under the VAT system or
be subject to the microenterprise tax payment regime; and (3) individuals,
including employees, online traders, etc., are required to register for a tax
identification number for tax purposes.
The determination of which tax system a new entity will be registered underis based on a number of factors, such as its business plan, the nature andexpected size of the business activities, and its registered capital.

Page 1Tax Audits
General tax audit process
The Tax Authority can pursue, within three accounting years, the following
types of tax audits:
1. Regular audits: These are conducted according to official targets andplans.
2. Audits with advance notice: These are unplanned but the taxpayer
is given notice. They are conducted at the taxpayer’s premises whennecessary.
3. Urgent audits: These are also unplanned and are conducted on an
emergency basis at the taxpayer’s premises.
A taxpayer’s accounting documents are audited yearly by the Tax Authority
with the tax computations are checked accordingly. Tax audits of high-risk
entities must be completed within six months.
Each audit is summarized in an audit memorandum, which is signed by boththe tax auditors and the taxpayer’s accountant or representative.

VAT audit process
Lao taxpayers may be subject to VAT audits at the discretion of the Tax
Authority. They may be conducted for up to three years after the original filingdate of the VAT.
There are three kinds of VAT audits:
1. Desk audit: This is conducted at the Tax Authority’s office.
2. Field audit: This is conducted at the taxpayer’s office.
3. Inspection at relevant sites: This is conducted at locations where stockis held within the country.
VAT audits are intended to be conducted on a regular basis with prior noticeand end with a memorandum signed by both parties.

Annual audit of personal income tax
The income derived from salaries/wages and other cash and in-kind benefits
must be audited on an annual basis, not later than 31 March of the following
year, per the following annual progressive rates with deduction of the annual
family support allowance (which is up to LAK15 million (or LAK5 million perperson) for the employee’s spouse, children under 18 years old, parents, andphysically disabled persons who do not have other income sources):

Page 2

Level123456Taxable salaryat each level(LAK)

Basis ofcalculation
(LAK)

Tax
rate

Incometax ateach level(LAK)

Cumulative
income tax(LAK)

15,600,000 and
below
15,600,001 60,000,000
60,000,001 180,000,000
180,000,001300,000,000
300,000,001780,000,000
Above
780,000,000

15,600,000

0%

0

0

44,400,000

5%2,220,000

2,220,000

120,000,000

10%

12,000,000

14,220,000

120,000,000

15%

18,000,000

32,220,000

480,000,000

20%

96,000,000

128,220,000

25%Page 3

Profit Tax (corporate income tax)
Residency
Taxpayers are all legal entities and organizations, including those that operatebusinesses in Laos or overseas who are obligated to pay taxes to the State asprovided in the laws and regulations.

Rates
A standard 20% profit tax (“PT”) rate applies to domestic and foreigncompanies that have legal entity status.
A special 22% rate applies to tobacco companies.
Lower PT rates apply as follows:• 0.1% for microenterprises (only for VAT-registered ones).
• 3% for three years for a newly registered small-scale entity, after which thestandard PT rate applies.
• 5% for three years for a newly registered medium-scale entity, after which
the standard PT rate applies.
• 5% for human resource development and certain medical activities, after
their tax holiday ends.
• 7% for activities using new innovative technology, and those that areenvironmentally friendly, use natural resources frugally, and use clean
energy for their production, after their tax holiday ends.
• 13% for four years for the companies listed Lao stock exchange, after which
the standard PT rate applies.

Computation
The annual accounting profit is the difference between the total businessincome and total business expenditures.
PT is computed by applying the tax rate to the taxable basis, which is theaccounting profit increased by any non-deductible expenses and reduced byany legally authorized deductions.

Deductible expenses and other tax adjustments
As a general rule, expenses are deductible if paid or incurred during the tax
year, expended for business purposes, for a “reasonable” amount, invoiced,
and legally documented.

Page 4

Expense/income

Tax adjustment

Non-deductible• PT• Input VAT relating to fixed asset purchases, which expense
is deducted against output VAT on a monthly basis• Depreciation deducted in excess of the allowed
rates and/or useful lives• Bad debts (previously taxed) with supporting
evidence• Depreciation on fixed assets that have not beenrecorded as assets belonging to the entity• Salaries paid by a partnership company to its
partners who are not part of the management or
the workforce• Entertainment, golfing, and other expenses
unrelated to the business• Expenses related to business operations but for
which there is no official receipt or there is an
improper receipt• Expenses related to business operations for which
there is an official receipt but were not declaredeach month• Expenses that are higher than the market price• All types of reserves• Impairment of assets• Interest on loans taken by shareholders tocontribute as equity• Deferred tax expenses• All types of penalties• Unrealized foreign exchange losses
Recovery of all types of reserves
Surplus incurred from the revaluation of real estateand precious metals
Bad debts (provision recoveries) that have alreadybeen taxed
Income from deferred tax

Non-taxable income
Non-taxable income

Unrealized foreign exchange gains

Non-taxable income

Non-taxable income
Non-taxable income

Dividends received that were derived from an
Non-taxable income
investment in another company that is already taxed
Page 5

Depreciation
Lao law recognizes three depreciation methods: straight-line, decliningbalance, and activity-based (a recent addition).
However, the Income Tax Law 2019 only specifies the straight-line method
according to the following rates:
Expense/income
Intangible fixed assets• Company establishment costs• Mining exploration and research costs• Software
Tangible fixed assets• Industrial buildings with a useful life of 20 years or
less• Industrial buildings with a useful life of more than
20 years• Permanent commercial and residential buildings• Semi-permanent commercial and residentialbuildings• Machinery and vehicles for extraction, clearing,land development for industrial, agriculture,
handicrafts, and other construction• Material and office supplies• Ships and boats

Tax adjustment
50%
20%
20%
5%
2%
5%
10%
20%

20%
10%

• Equipment and tool sets for certain professions

20%• Land and water transport vehicles

20%• Passenger and cargo planes

Flight hours• Planted trees, sires, female breeders, and dairy According to thecattleage of each kindof livestock andplantation

Tax loss utilization
Business operators are entitled to carry forward their tax losses for fiveconsecutive tax years. The tax losses must have been certified by both anindependent audit firm and the Tax Authority.
Page 6

Filing and payment
The tax year-end is normally 31 December. Companies must file their financial
report with other supporting documents by 31 March of the following year.
PT is payable in advance semiannually, on 20 July and 20 January of thefollowing year, and the amount is based on either the previous year’s tax
payment, the current quarter’s profit, or the estimated PT according to thecompany’s business plan.
The actual tax amount is computed in the annual tax return based on an
entity’s financial report. Any additional amount due must be paid upon
submission of the annual return and financial report. If an entity has madeexcess payments, the entity will have a tax credit, which can then carriedforward to the following year or be refunded.

PT of non-residents
Lao entities must withhold PT from payments made to their foreign providers/
suppliers and remit the amount to the Tax Authority within 15 working days.
The PT is withheld using the deemed rate mechanism.

Page 7

Microenterprises
Business operators that are not registered in the VAT system must pay tax
based on the lump-sum tax rates, which are the same as those applicableto microenterprises, to the Tax Authority on a monthly, quarterly, or annual
basis via the banking system except for areas where there are no banking
services. The applicable tax rate will vary depending on the industry and levelof turnover.
Annual turnover(LAK)

Lump-sum tax rates
Manufacturing

Less than 50,000,000 Exempt
50,000,001 –1%
400,000,000

Page 8

Trading
Exempt2%Services
Exempt3%

Income Tax
Overview
Income tax applies to any income generated in Laos regardless of thebeneficiary’s nationality or tax residency, except where a double taxationagreement (“DTA”) applies.
Main types of income
Personal income tax• Salaries; wages; overtime; bonuses; allowances ofexecutive directors and boards of directors; cash or inkind benefits (such as housing allowances, vehicle use
without being charged (from the employer), telephone
top-ups, internet top-ups, other services for personal
purposes)• Salaries of LAK1.30 million or less
• Salaries of foreign diplomats, and staff and experts ofinternational organizations• Extra-working hours or overtime payments only for
employees receiving a basic salary of LAK2 million or less
• Uniforms and equipment for preventing labor accidents• Staff training and study support• One-time allowances• Retirement allowances
Financial income• Dividends• Sales of shares• Loan interest, guarantee fees
• Profit derived from the sale of shares on the Lao stock
exchange• Dividends distributed to partners or shareholders of acompany registered on the stock exchange• Income from bonds issued by listed companies• Interest on deposits and government bonds• Premiums for life and property insurance

Tax treatment
TaxableExemptExemptExemptExemptExemptExemptExemptTaxableTaxableTaxableExemptExemptExemptExemptExemptPage 9Main types of income

Tax treatment

Other income• Freelancer: commission, consultant fees, etc.
• Online trading• Lottery winnings• Gifts and prizes of more than LAK1.30 million• Real estate rental income, revenue from movable assets,royalties and other income derived from intellectual
property• Sales price of the transfer of real estate rights• Inheritance from a horizontal line
• Gifts and prizes of LAK1.30 million or less
• Rent from the assets of a business operator• Income from the transfer of real estate rights recorded in
the balance sheet of a business operator• Inheritance from a vertical line

TaxableTaxableTaxableTaxableTaxableTaxableTaxableExemptExemptExemptExemptRates
Employment income is taxed at the following progressive rates:

Level
1
2
3
4
5
6
Page 10

Taxable salaryat each level(LAK)

Basis ofcalculation
(LAK)

Tax
rate

Incometax ateach level(LAK)

Cumulative
income tax(LAK)1,300,000 and
below
1,300,001 –5,000,000
5,000,001 –15,000,000
15,000,001 –25,000,000
25,000,001 –
65,000,000
Above
65,000,000

1,300,000

0%

0

0

2,000,000

5%

185,000

185,000

3,000,000

10%

1,000,000

1,185,000

6,000,000

15%

1,500,000

2,685,000

12,000,000

20%

12,000,000

10,685,00025%Other types of income are subject to the following rates (not an exhaustivelist):
Type of income

Individuals

Legal entities

Resident

Non-resident

Agriculture landtransfer
Share transfer
Land/house/building
transfer

1%

N/A

N/A

2%
2%

2%
N/A

Online trading
Lottery winnings
Intellectual property
Commissions
Consultancy/otherservice fees
Dividends
Non-banking loaninterest
Guarantee fees
Rentals

2%
5%
5%
5%
5%

2%
10%
(house/building)
?
5%
5%
5%
5%

N/A
N/A
5%
N/A
N/A

10%
10%

10%
10%

10%
10%

10%
10%

?
10%

N/A
N/A

Computation, filing, and payment
Income tax from salaries must be calculated and withheld from salary
payments by employers on a monthly basis. The tax must be remitted to theTax Authority by the 20th of the following month.
For real estate rentals and other transactions, the tax is calculated based on
the lease agreement and the standard prices. The beneficiary must declare
the tax due to the Tax Authority within 15 working days from the date ofreceiving the rental payment.
Income tax other than from the types of income mentioned above must be
calculated and paid within 15 working days from the date payment is made.
Depending on the case, either the payer or the beneficiary will be responsible
for paying the tax.

Page 11

Value Added Tax
Overview
VAT is an indirect tax that is collected on the consumption of goods andservices within Laos. Individuals, legal entities, and organizations that areoperating businesses in Laos are responsible for collecting VAT from theconsumers of their goods and services (output VAT). They are entitled todeduct the input VAT they pay on purchases of goods and services directly
used in their business by offsetting against their output VAT.

Scope of application
Taxable supplies of goods and services cover the importation of goods andsupplies within Laos, including the services of non-residents, and legal entities
and organizations unincorporated in Laos. Disbursements to non-residents
and organizations unincorporated in Laos for service provision must have theapplicable VAT withheld and remitted to the Tax Authority by the Lao client.

Non-taxable goods and services
The Lao VAT Law includes most common exemptions (importation ofstamps, aircraft, goods for the official work of embassies and internationalorganizations, medical services and equipment). Specific exemptions mostly
relate to key public priorities:• Agriculture: The importation or sale of non-processed products andanimals, seeds, fertilizers, equipment.
• Education: The importation and sale of textbooks, teaching manuals andmaterials, modern learning materials, educational services.
• Finance: Health, life, animal and forest insurance services, and depositinterest and loan interest from transactions of authorized commercial
banks or financial institutions.
• Minerals: The importation of minerals for production for export to special
zones or overseas.
• Electricity: The importation or exportation to special zones or overseas ofelectricity, including sales to the electricity entities within the country (notethat electricity distributed to domestic users is VATable).
• The Import of raw materials, chemical substances, equipment, andproduction machinery and devices that cannot be domestically or
sufficiently made for use in production and investment in fixed assets.
• The export of unprocessed natural resources.

Page 12

Registration
Compulsory VAT registration applies to all small, medium, and large business
entities.

Rates of tax
Taxable supplies made in or imported into Laos are subject to VAT at one of
two rates:
Main types of income
•
•
•
•
•
•

Import of goods
Import and supplies of minerals in the domestic market
Electricity distributed to domestic users
Domestic goods and services
Export of goods
Export of processed natural resources

Tax treatment
7%0%

Basics of taxation
For the supply of goods and services, VAT is payable monthly, and returns
must be filed by the 20th of the following month. For imports, the VAT return
must be submitted at the same time as the customs return and the VAT due ispaid at the time of customs clearance.
An invoice report schedule must also be submitted by the 20th of thefollowing month.
VAT refunds are available to export businesses, businesses that merge, split,
dissolve, or go bankrupt, tourists, embassies, international organizations, anyother individual or entity that has made a VAT overpayment, and businesses
that have not fully deducted their input VAT within three months from themonth the input VAT was incurred.

Page 13

Excise Tax
Scope
Excise tax is another indirect tax, but with a more restricted scope than VAT
and a number of different rates. Supplies or imports of specific goods, aswell as supplies of specific services are subject to excise tax unless expressly
exempted.

Rates
Please refer to the excise tax quick reference table at the beginning of thisbooklet.

Basics of taxation
Excise tax is an ad-valorem tax, i.e. it applies to either the CIF value increasedby the customs duty in the case of imports, or the commercial value of thetaxable supply.
Some specific products, e.g. beer, alcohol, or tobacco will be subject to excise
tax twice—at the importation and upon domestic sale.
Excise tax must be declared and paid at the time of importation in conjunction
with the customs duty, or monthly by the 20th of the month following themonth of supply.

Page 14Customs Duty
Import duty
There are a number of goods on which import duty applies, with some
exceptions, including goods temporarily imported into Laos, personal
belongings, goods transported because of relocation, and essential items
used for education, health, scientific study, and religious purposes.
Exemptions or reduced duty might be available for exports and imports done
under the Investment Promotion or the Special/Specific Economic Zone
policies.
Customs duty is levied on goods entering Laos at variable rates.

Export duty
There is no export duty other than on a limited list of restricted products at
rates of 5% to 40%.

Page 15

Double Taxation Agreements
Laos currently implements DTAs signed with Belarus, Brunei, China, Indonesia,
South Korea, North Korea, Kuwait, Luxembourg, Malaysia, Myanmar, Russia,
Singapore, Thailand, and Vietnam.

Page 16

Transfer Pricing
There are currently no formal transfer pricing regulations in Laos.
The current practice of some tax auditors is to use point 11 of Article 18 of
the Amendment of the Tax Laws No. 01/NA dated 7 August 2021 to reject any
expense that is “higher than reality”.
The “arm’s length” principle is the standard universally adopted in international
tax law: it should be followed by Lao taxpayers for all expense transactions,
whether with third parties or related parties.
If the taxpayer is part of a group that has a transfer pricing group policy,
this documentation should be maintained, even if not required by law, toexplain and provide supporting evidence for the pricing used in transactions
between the Lao entity and its related parties.

Page 17Investment Project Incentives
The promoted sectors under Lao investment regulations are agriculture,industry, handicraft, infrastructure, green energy, categorized into threedifferent prioritized zones.
The customs duty and tax incentives provided in the investment regulations
are as follows:• Exemption from PT for a certain number of years (between 4 and 15 years)
depending on the zone of the investment starting from the first commercial
operation date.
• Exemption from PT in the accounting year following the reinvestment of
the net profit in the business for expansion.
• Zero-rated VAT and exemption from import duty on the importation ofequipment (not sufficiently available in Laos), machinery for production,and raw materials, equipment, and spare parts for export activities.

Page 18

Administration
Tax payment plan
Lao taxpayers are required by law to prepare a tax payment plan each year foreach type of tax they are liable for and submit it to the Tax Authority.

Accounting and invoicing
Accounting systems must comply with Lao Financial Reporting Standards orInternational Financial Reporting Standards, and they must be approved by
the Ministry of Finance. Supporting documents must be kept available for 10
years.
For every service or supply, taxpayers must issue invoices that meet the Lao
requirements and conform to the specific and general formats issued by the
Ministry of Finance.

Refunds
To be eligible for a refund for a tax overpayment, the refund must be requested
within three months from the date of the tax payment.
The request for refund will be considered within five working days from thedate of its receipt. The refund will be made to the taxpayer within 10 working
days from the date of receipt of the correct and complete information.

Tax due dates
Type of Tax
Profit tax:
• First filing and payment• Second filing and payment• Final payment• Filing and payment ofwithholding
Income taxes:• Personal income tax

Due Date
20 July
20 January (of the following year)
31 March (of the following year)
Within 15 working days of the date ofpayment

On a monthly basis, by the 20th of thefollowing month• Rentals, dividends, interest,
Payment within 15 working days fromroyalties, and other service fees the date of payment
Value added tax
20th of the following month or at
customs clearance for importation
Excise tax
Customs duty
At customs clearance
Page 19

Penalties
The following penalties apply depending on the tax and the violation.
Violation
Delay in submitting return and tax payment:• Late payment• Late filing• Late submission of a nil return• Failure to file
Incomplete declaration and tax payment:• Failure to invoice or false invoices issued• Inaccuracy of tax return and payment
Tax outstanding:• First demand notice• Second demand notice• Third demand notice

Page 20

Penalty rate or amount
0.1% of tax due per day
LAK500,000
LAK500,000
LAK1,500,000
LAK1,000,000 per set
50% of the tax due
30%
60%
100% of the tax due

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MYANMARCAMBODIAINDONESIA

We are a network of leading law and tax advisory firms with offices in Bangladesh, Cambodia,
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CONTACTS
Laos
Level 4, Kolao Tower II
23 Singha Road, Nongbone Village, Saysettha District Vientiane
T: +856 21 454 679
E: daodeuane.duangdara@vdb-loi.com
sornpheth.douangdy@vdb-loi.com
Bangladesh
9th Floor, Ali Bhaban
92 Kazi Nazrul Islam Avenue
Karwanbazar
Dhaka 1215 Bangladesh
Tel: +880 167 302 4953
CambodiaNo. 33, Street 294 (corner of Street 29)
Sangkat Tonle Bassac
Khan Chamkarmorn
Phnom Penh 120101
T: +855 23 964 430~434
F: +855 23 964 154
Indonesia
Plaza Bisnis Kemang, Suite 211
JI. Kemang Raya, No. 2
Jakarta 12730
T: +62 21 718 3415
The Cityloft Sudirman
Suite 1119, Jalan K. H. Mas Mansyur Kav.
121, Jakarta, 10220
T: +62 21 2555 6611

Page 22

MyanmarLevel 10, Units 01-05
Junction City Office Tower
Corner of Bogyoke Aung San
Road and 27th Street
Pabedan Township, Yangon
T: +951 9253 752~756
F: +951 9253 758
ParkRoyal Hotel
Jade Villa No. 13/14
Hotel Zone
Dekhina Thiri Township
Nay Pyi Taw
T/F: +95 678 106 089
VietnamLevel 20, Unit 2010
Sun Wah Tower
115 Nguyen Hue Blvd.
District 1
Ho Chi Minh City
T: +84 28 3821 9525

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