LAOS

TAX BOOKLET
2022 - 2023

Get to the point.

 © VDB Loi Co., Ltd. 2022
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entity, without the prior written permission of the publisher or copyright holder.

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, please
contact one of our advisers or visit our website at www.vdb-loi.com.
Contents
Quick Reference Tax Rate Tables....................................................... i
Tax 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
Type TOI Rate
Standard rate 20%
Tobacco companies 22%
Microenterprises1 that have 0.1%
volun-tarily registered in the VAT
system
Small-scale entities2 that have 3% (for the first three years) then 20%
newly registered in the VAT system
Medium-scale entities3 that have 5% (for the first three years) then 20%
newly registered in the VAT system
Human resource development 5% (af-ter the end of the PT ex-
and certain medical activities emption peri-od as specified in the
In-vestment Promo-tion Law)
Activities using new innovative 7%
technology, and those that are (after the end of the PT exemption
environmentally friendly, use period as specified in the Investment
natural resources frugally, and use Promotion Law)
clean energy for their production
Company listed on the Lao stock 13% (for the first four years) then 20%
exchange

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
Gross profit Profit tax
Income source
rates deemed rates
Agricultural and handicraft activities 7% 1.4%
Industrial and other processing industry 10% 2%
activ-ities
Trading/commerce and service activities 15% 3%
Hydropower and mining activities 30% 6%

Microenterprises
Annual revenue Lump-sum tax rates
(LAK) Manufacturing Trading Services
Less than 50,000,000 Exempt Exempt Exempt
50,000,001 – 400,000,000 1% 2% 3%

Monthly personal Income Tax

Taxable Income
Basis of Cumulative
salary at Tax tax at
Level calculation income tax
each level rate each level
(LAK) (LAK)
(LAK) (LAK)
1 1,300,000 1,300,000 0% 0 0
and below
2 1,300,001 – 2,000,000 5% 185,000 185,000
5,000,000
3 5,000,001 – 3,000,000 10% 1,000,000 1,185,000
15,000,000
4 15,000,001 – 6,000,000 15% 1,500,000 2,685,000
25,000,000
5 25,000,001 – 12,000,000 20% 8,000,000 10,685,000
65,000,000
6 Above 25%
65,000,000

Page ii
Other Income Taxes
(not an exhaustive list)

Individuals Legal
Type of income
Resident Non-resident entities
Agriculture land transfer 1% N/A N/A
Share transfer 2% 2% 2%
Land/house/building transfer 2% 10% N/A
(house/building)
Online trading 2% ? N/A
Lottery winnings 5% 5% N/A
Intellectual property 5% 5% 5%
Commissions 5% 5% N/A
Consultancy/other service fees 5% 5% N/A
Dividends 10% 10% 10%
Non-banking loan interest 10% 10% 10%
Guarantee fees 10% ? N/A
Rentals 10% 10% N/A

Value Added Tax

Type of supply Rate
• Import of goods 7%
• Import and supplies of minerals in the domestic market
• Electricity distributed to domestic users
• Domestic goods and services
• Export of goods 0%
• Export of processed natural resources

Page iii
Excise Tax
Type of good Rate
Fuel:
• Gasoline (super) 40%
• Gasoline (normal) 31%
• Diesel 21%
• Jet fuel 8%
• Lubricants, hydraulic oil, grease, and brake oil 5%
• Export of goods 0%
• Export of processed natural resources

Rates
Type of good
CBU CKD IKD
Vehicles:
1 Gas- or diesel-powered motorcycles
• With engine volume of 110 cc and lower 10% 6% 3%
• With engine volume of 111-150 cc 20% Motorcycles
• With engine volume of 151-200 cc 28% over 110 cc
are charged
• With engine volume of 201-250 cc 39%
for at their
• With engine volume of 251-500 cc 75% CBU rates.
• With engine volume of 501-800 cc 100%
• With engine volume of 801 cc or more 110%
2 Gas- or diesel-powered transport vehicles:
• With engine volume of 1,000 cc and lower 26%
• With engine volume of 1,001-1,600 cc 31%
• With engine volume of 1,601-2,000 cc 36%
• With engine volume of 2,001-2,500 cc 41%
• With engine volume of 2,501-3,000 cc 52%
• With engine volume of 3,001-4,000 cc 77%
• With engine volume of 4,001-5,000 cc 92%
• With engine volume of 5,001 cc or more 102%
3 Hybrid transport vehicles 50% of the rates
charged in No. 2 above.

Page iv
 Rates
Type of good
CBU CKD IKD
4 Electric passenger vehicles 3%
5 Two-door and two-and-a-half door SUVs:
• Gas- or diesel-powered 16%
• Electric-powered 3%
6 Small passenger and transport vehicles
• Gas- or diesel-powered 11%
• Electric-powered 3%
7 Medium passenger and transport vehicles
• Gas- or diesel-powered 9%
• Electric-powered 3%
8 Large passenger and transport vehicles
• Gas- or diesel-powered 5%
• Electric-powered 3%
Refrigerated vans, trucks transporting liquids, 10%
gas, cement, or fuel, water vehicles, cranes, forklift
trucks, cement mixers, waste suction vehicles, all
kinds of spraying vehicles, and camper vans
Trucks, articulated trucks, and semi-articulated 5%
trucks
Golf carts and vehicles used on golf courses 15%
Sightseeing passenger cars 5%
ATVs and Gokarts 25%
Cars that use fuel oil produced or assembled in a 5% 3%
domestic factory

Type of good Rate

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

Page v
 Type of good Rate
Accessories for vehicles:
• Sound systems 25%
• Decorative accessories 20%
Whiskey and alcoholic beverages:
• Alcohol content of 10% or below 62%
• Alcohol content of over 10% to 23% 70%
• Alcohol content of over 23% 80%
Beer:
• Alcohol content of 0.5% or below 20%
• Alcohol content of over 0.5% 60%
Tobacco:
• Cigars, cigarettes in packages and other form 57%
• Shredded tobacco 42%
Gas for vehicles 10%
Ready-made drinks:
• Soft drinks, sodas, mineral water, fruit juices, and other 7%
similar drinks
• Stimulant drinks 12%
Crystal items or crystal adornments 25%
Carpets made from wool and animal parts 20%
Perfumes and cosmetics 25%
Playing cards and gambling materials if author-ized by the 100%
relevant sectors
Traditional rockets, fireworks, firecrackers if authorized by 85%
the relevant sectors
Speedboats, yachts, motorboats, including their spare parts 25%
and accessories
Satellite television signal receivers 15%
Audio-video players, cameras, telephones, audio-video 15%
recorders, musical instruments, including their components
and accessories
Aerial drones, aerial cameras, parachutes and paragliders, 25%
and small jet engines

Page vi
 Type of good Rate
Billiard tables, snooker tables, bowling equipment, football 35%
playing tables
All kinds of game players Special rate
based on the
regulation

Type of service Rate

Entertainment: Nightclubs, discotheques kara-oke 40%
Bowling services 24%
Beauty services 13%
Use of services for mobile phones, digital tele-vision, 5%
cable television
Internet services 2% 0%
(FY2022) (FY2023)
Golfing services 25%
Lottery services 30%
Casino services, poker machines, and all kinds of Special rate based
game players on the regulation
Motor racing, horse racing, and cockfighting 30%
Ballooning, parachuting and paragliding, and aerial 12%
photography services

Customs Duty
Description Rate
Import duty:
• From ASEAN countries 0 to 30%
• Passenger and transport vehicles Variable
Export duty:
• Standard rate 0%
• Specific rates for specific products 5% to 40%

Page vii
Abbreviations
Term Definition
ASEAN Association of Southeast Asian Nations
CBU Completely Built Up
CGT Capital Gains Tax
CKD Completely Knocked Down
DTA Double Taxation Agreement
IKD Incompletely Knocked Down
NBV Net Book Value
PE Permanent Establishment
PIT Personal Income Tax
PT Profit Tax
SSO Social Security Organization
ST Specific Tax on Certain Merchandise and Services
TIN Tax Identification Number
VAT Value Added Tax
WHT Withholding Tax

Page viii
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 registered
under the value added tax (“VAT”) system; (2) entities with annual revenue
of 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 under
is based on a number of factors, such as its business plan, the nature and
expected 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 and
plans.
2. Audits with advance notice: These are unplanned but the taxpayer
is given notice. They are conducted at the taxpayer’s premises when
necessary.
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 both
the 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 filing
date 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 stock
is held within the country.
VAT audits are intended to be conducted on a regular basis with prior notice
and 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 per
person) for the employee’s spouse, children under 18 years old, parents, and
physically disabled persons who do not have other income sources):

Page 2
 Income
Taxable salary Basis of Cumulative
Tax tax at
Level at each level calculation income tax
rate each level
(LAK) (LAK) (LAK)
(LAK)
1 15,600,000 and 15,600,000 0% 0 0
below
2 15,600,001 - 44,400,000 5% 2,220,000 2,220,000
60,000,000
3 60,000,001 - 120,000,000 10% 12,000,000 14,220,000
180,000,000
4 180,000,001- 120,000,000 15% 18,000,000 32,220,000
300,000,000
5 300,000,001- 480,000,000 20% 96,000,000 128,220,000
780,000,000
6 Above 25%
780,000,000

Page 3
Profit Tax (corporate income tax)
Residency
Taxpayers are all legal entities and organizations, including those that operate
businesses in Laos or overseas who are obligated to pay taxes to the State as
provided in the laws and regulations.

Rates
A standard 20% profit tax (“PT”) rate applies to domestic and foreign
companies 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 the
standard 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 are
environmentally 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 business
income and total business expenditures.
PT is computed by applying the tax rate to the taxable basis, which is the
accounting profit increased by any non-deductible expenses and reduced by
any 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
• PT Non-deductible
• 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 been
recorded 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 declared
each month
• Expenses that are higher than the market price
• All types of reserves
• Impairment of assets
• Interest on loans taken by shareholders to
contribute as equity
• Deferred tax expenses
• All types of penalties
• Unrealized foreign exchange losses
Recovery of all types of reserves Non-taxable income
Surplus incurred from the revaluation of real estate Non-taxable income
and precious metals
Bad debts (provision recoveries) that have already Non-taxable income
been taxed
Income from deferred tax Non-taxable income
Unrealized foreign exchange gains 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, declining
balance, 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 Tax adjustment

Intangible fixed assets
• Company establishment costs 50%
• Mining exploration and research costs 20%
• Software 20%
Tangible fixed assets
• Industrial buildings with a useful life of 20 years or 5%
less
• Industrial buildings with a useful life of more than 2%
20 years
• Permanent commercial and residential buildings 5%
• Semi-permanent commercial and residential 10%
buildings
• Machinery and vehicles for extraction, clearing, 20%
land development for industrial, agriculture,
handicrafts, and other construction
• Material and office supplies 20%
• Ships and boats 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 the
cattle age of each kind
of livestock and
plantation
Tax loss utilization
Business operators are entitled to carry forward their tax losses for five
consecutive tax years. The tax losses must have been certified by both an
independent 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 the
following 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 the
company’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 made
excess payments, the entity will have a tax credit, which can then carried
forward 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 applicable
to 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 level
of turnover.

Annual turnover Lump-sum tax rates

(LAK) Manufacturing Trading Services
Less than 50,000,000 Exempt Exempt Exempt
50,000,001 – 1% 2% 3%
400,000,000

Page 8
Income Tax
Overview
Income tax applies to any income generated in Laos regardless of the
beneficiary’s nationality or tax residency, except where a double taxation
agreement (“DTA”) applies.

Main types of income Tax treatment

Personal income tax
• Salaries; wages; overtime; bonuses; allowances of Taxable
executive directors and boards of directors; cash or in-
kind 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 Exempt
• Salaries of foreign diplomats, and staff and experts of Exempt
international organizations
• Extra-working hours or overtime payments only for Exempt
employees receiving a basic salary of LAK2 million or less
• Uniforms and equipment for preventing labor accidents Exempt
• Staff training and study support Exempt
• One-time allowances Exempt
• Retirement allowances Exempt
Financial income
• Dividends Taxable
• Sales of shares Taxable
• Loan interest, guarantee fees Taxable
• Profit derived from the sale of shares on the Lao stock Exempt
exchange
• Dividends distributed to partners or shareholders of a Exempt
company registered on the stock exchange
• Income from bonds issued by listed companies Exempt
• Interest on deposits and government bonds Exempt
• Premiums for life and property insurance Exempt

Page 9
 Main types of income Tax treatment
Other income
• Freelancer: commission, consultant fees, etc. Taxable
• Online trading Taxable
• Lottery winnings Taxable
• Gifts and prizes of more than LAK1.30 million Taxable
• Real estate rental income, revenue from movable assets, Taxable
royalties and other income derived from intellectual
property
• Sales price of the transfer of real estate rights Taxable
• Inheritance from a horizontal line Taxable
• Gifts and prizes of LAK1.30 million or less Exempt
• Rent from the assets of a business operator Exempt
• Income from the transfer of real estate rights recorded in Exempt
the balance sheet of a business operator
• Inheritance from a vertical line Exempt

Rates
Employment income is taxed at the following progressive rates:

Income
Taxable salary Basis of Cumulative
Tax tax at
Level at each level calculation income tax
rate each level
(LAK) (LAK) (LAK)
(LAK)
1 1,300,000 and 1,300,000 0% 0 0
below
2 1,300,001 – 2,000,000 5% 185,000 185,000
5,000,000
3 5,000,001 – 3,000,000 10% 1,000,000 1,185,000
15,000,000
4 15,000,001 – 6,000,000 15% 1,500,000 2,685,000
25,000,000
5 25,000,001 – 12,000,000 20% 12,000,000 10,685,000
65,000,000
6 Above 25%
65,000,000

Page 10
Other types of income are subject to the following rates (not an exhaustive
list):

Individuals
Type of income Legal entities
Resident Non-resident
Agriculture land 1% N/A N/A
transfer
Share transfer 2% 2% 2%
Land/house/building 2% 10% N/A
transfer (house/
building)
Online trading 2% ? N/A
Lottery winnings 5% 5% N/A
Intellectual property 5% 5% 5%
Commissions 5% 5% N/A
Consultancy/other 5% 5% N/A
service fees
Dividends 10% 10% 10%
Non-banking loan 10% 10% 10%
interest
Guarantee fees 10% ? N/A
Rentals 10% 10% 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 the
Tax 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 of
receiving 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 and
services within Laos. Individuals, legal entities, and organizations that are
operating businesses in Laos are responsible for collecting VAT from the
consumers of their goods and services (output VAT). They are entitled to
deduct 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 and
supplies 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 the
applicable 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 of
stamps, aircraft, goods for the official work of embassies and international
organizations, medical services and equipment). Specific exemptions mostly
relate to key public priorities:
• Agriculture: The importation or sale of non-processed products and
animals, seeds, fertilizers, equipment.
• Education: The importation and sale of textbooks, teaching manuals and
materials, modern learning materials, educational services.
• Finance: Health, life, animal and forest insurance services, and deposit
interest 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 of
electricity, including sales to the electricity entities within the country (note
that electricity distributed to domestic users is VATable).
• The Import of raw materials, chemical substances, equipment, and
production 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 Tax treatment

• Import of goods
• Import and supplies of minerals in the domestic market
7%
• Electricity distributed to domestic users
• Domestic goods and services
• Export of goods
0%
• Export of processed natural resources

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 is
paid at the time of customs clearance.
An invoice report schedule must also be submitted by the 20th of the
following month.
VAT refunds are available to export businesses, businesses that merge, split,
dissolve, or go bankrupt, tourists, embassies, international organizations, any
other individual or entity that has made a VAT overpayment, and businesses
that have not fully deducted their input VAT within three months from the
month 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, as
well 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 this
booklet.

Basics of taxation
Excise tax is an ad-valorem tax, i.e. it applies to either the CIF value increased
by the customs duty in the case of imports, or the commercial value of the
taxable 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 the
month 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, to
explain and provide supporting evidence for the pricing used in transactions
between the Lao entity and its related parties.

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Investment Project Incentives
The promoted sectors under Lao investment regulations are agriculture,
industry, handicraft, infrastructure, green energy, categorized into three
different 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 of
equipment (not sufficiently available in Laos), machinery for production,
and raw materials, equipment, and spare parts for export activities.

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Administration
Tax payment plan
Lao taxpayers are required by law to prepare a tax payment plan each year for
each 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 or
International 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 the
date 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 Due Date
Profit tax:
• First filing and payment 20 July
• Second filing and payment 20 January (of the following year)
• Final payment 31 March (of the following year)
• Filing and payment of Within 15 working days of the date of
withholding payment
Income taxes:
• Personal income tax On a monthly basis, by the 20th of the
following month
• Rentals, dividends, interest, Payment within 15 working days from
royalties, and other service fees the date of payment
Value added tax 20th of the following month or at
Excise tax customs clearance for importation
Customs duty At customs clearance

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Penalties
The following penalties apply depending on the tax and the violation.

Violation Penalty rate or amount

Delay in submitting return and tax payment:
• Late payment 0.1% of tax due per day
• Late filing LAK500,000
• Late submission of a nil return LAK500,000
• Failure to file LAK1,500,000
Incomplete declaration and tax payment:
• Failure to invoice or false invoices issued LAK1,000,000 per set
• Inaccuracy of tax return and payment 50% of the tax due
Tax outstanding:
• First demand notice 30%
• Second demand notice 60%
• Third demand notice 100% of the tax due

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