Verified Facts
The tax rates in Laos range from 5% to 24% for personal income tax, with a corporate tax rate of 24%, a value-added tax (VAT) rate of 10%, and a capital gains tax that is included in the income tax system.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Laos has a territorial taxation system, where only income earned within the country is subject to tax, regardless of the tax residency status of the individual or company. The residency rules for tax purposes in Laos are based on the number of days an individual spends in the country, with those spending more than 183 days in a calendar year considered tax residents. Tax residents are required to pay tax on their worldwide income, while non-residents are only taxed on their Lao-sourced income.
The Lao tax system is governed by the Taxation Law, which outlines the various types of taxes, including income tax, corporate tax, VAT, and property tax. The Ministry of Finance is responsible for the administration of taxes in Laos, and is responsible for collecting taxes, as well as providing guidance and support to taxpayers. The tax system in Laos is designed to be relatively straightforward, with a focus on simplicity and ease of compliance.
Personal Income Tax
| Income Bracket (LAK) | Tax Rate |
|---|---|
| 0 - 5,000,000 | 5% |
| 5,000,001 - 15,000,000 | 10% |
| 15,000,001 - 30,000,000 | 15% |
| 30,000,001 - 50,000,000 | 20% |
| 50,000,001 and above | 24% |
| Personal income tax in Laos is levied on the worldwide income of tax residents, and on Lao-sourced income of non-residents. Taxpayers are entitled to deductions and allowances, such as a personal allowance of LAK 5 million, and deductions for charitable donations and mortgage interest payments. Tax returns must be filed annually, and taxpayers are required to pay their tax liability in installments throughout the year. |
Corporate & Business Tax
- The corporate tax rate in Laos is 24%, which applies to the taxable profits of companies.
- Small business incentives are available, including a reduced corporate tax rate of 10% for small and medium-sized enterprises (SMEs) with annual turnover of less than LAK 500 million.
- Free zones are available in Laos, which offer tax exemptions and other incentives to companies that operate within these zones.
- Companies are required to register with the Ministry of Finance and obtain a tax identification number in order to operate in Laos.
- Withholding tax is levied on certain types of income, including dividends, interest, and royalties, at a rate of 10% for residents and 20% for non-residents.
VAT / Sales Tax
- The standard VAT rate in Laos is 10%, which applies to most goods and services.
- Reduced VAT rates of 5% and 0% apply to certain goods and services, such as basic foodstuffs and medical equipment.
- Exemptions from VAT are available for certain types of businesses, including small businesses with annual turnover of less than LAK 100 million.
- A tourist refund scheme is available, which allows tourists to claim a refund of VAT paid on certain goods and services.
For Expats & Foreign Workers
- Tax residency rules for expats and foreign workers are based on the number of days spent in Laos, with those spending more than 183 days in a calendar year considered tax residents.
- Laos has double taxation treaties with 10 countries, which help to prevent double taxation of income.
- Social security contributions are required for expats and foreign workers, at a rate of 6% of salary.
- Remittance rules allow expats and foreign workers to remit their salary and other income abroad, subject to certain conditions.
- Work permits are required for foreign workers, and are typically issued for a period of one year.
- Tax obligations for expats and foreign workers include filing annual tax returns and paying tax on their worldwide income, if they are considered tax residents.
Crypto & Investment Income
- Investment income, including dividends, interest, and capital gains, is subject to tax in Laos.
- Dividends are taxed at a rate of 10%, and are subject to withholding tax.
- Cryptocurrency is subject to tax in Laos, and is treated as a form of property for tax purposes.
- Capital gains tax is included in the income tax system, and is taxed at the same rate as other types of income.