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Laos Tax Law focuses on different types of direct and indirect taxes. Direct taxes include profit tax, personal income tax, and property tax while indirect taxes are customs duties, excise tax, and value-added tax (VAT). Addition to these, there are special taxes like Natural Resource Tax. It is important to note that tax law in Laos is governed by the Tax Law No. 70/NA which came into force on January 24, 2019. This complex system requires, in many situations, the interpretation and advice of a specialist lawyer to avoid infringements.
Understanding and staying compliant to the tax laws in Laos can be complex and challenging due to regular changes, revisions, and updates. Individuals and businesses alike may require the services of a lawyer to ensure they correctly file their tax returns, to legally minimize their tax liabilities and to deal with any existing or potential dispute against the tax authorities. If you are a foreign investor, a tax lawyer can give you sound advice on taxation issues related to your business operation in Laos.
There are multiple features of the tax law in Laos. Profit taxes, for instance, are levied at 24% for companies in the general sector. Personal income tax ranges from 0% to 24%, depending on the slab of income. The VAT, charged on the supply of goods and services, is at 10%. Sale of immovable property, transfer of assets and capital are liable for taxes. Domestic and international business transaction are also taxed differently. Liabilities can be reduced only in compliance with the law and require a strong understanding of the tax provisions in the country.
Any resident, expatriate or business that earns an income in Laos is obligated to pay taxes. This applies to foreigners living in Laos for more than 183 days in a fiscal year.
Personal income tax is based on a sliding scale, starting from 0% for those earning less than LAK 1 million to 24% for those earning more than LAK 40 million.
Laos has tax treaties to avoid double taxation with several countries, including China, Vietnam, Thailand, and South Korea.
The standard VAT rate in Laos is 10%.
The penalties for tax evasion can include fines, forced closure of business, confiscation of assets, and criminal charges.
Yes, foreign companies are subject to specific taxes according to the type and structure of the company and the sector of operation.
Indeed, a tax lawyer can provide valuable insights regarding tax planning and how to legally reduce your tax liabilities.
The tax year in Laos is the calendar year; from 1st January to 31st December.
Certain exemptions are granted on taxes in Laos, varying with type of tax, nature of business and other factors. For instance, there are exemptions in VAT for some goods and services.
A non-resident working in Laos has to pay personal income tax based on their income generated in Laos.
The Ministry of Finance, Laos serves as a resourceful government body for all tax-related information, updates and regulations. The Tax Department of the Ministry of Finance, in particular, deals with all matters regarding taxation. There are also a few reputed international accountancy firms that provide clarification, interpretation, and guidance for tax laws in Laos.
If you need legal assistance in tax, researching and hiring a professional, well-experienced tax lawyer who specializes in Lao tax law would be the right first step. Ensure the lawyer you choose is reputable, knowledgeable about local and national tax laws, and can communicate effectively in your language. It's important to meet the lawyer, discuss your situation, understand their consultation fee structure, and then take an informed decision.
