Profits tax (PT)
All companies (including all forms of legal entities) that are registered under Lao PDR law are subject to PT on their worldwide income. Companies formed under foreign law, operating a business in Lao PDR, and conducting business in Lao PDR are subject to tax on their income derived in Lao PDR.
The standard rate of PT for companies in Lao PDR is 24% of net profit after adjustments for non-deductible expenses and others according to Lao Tax Law No. 70/NA, dated 15 December 2015. The 24% rate applies to both domestic and foreign investors.
Tax holidays and reduced PT rates are applicable to companies whose investment activities qualify as promoted investment activities (see the Tax credits and incentives section for more information) or large investments in mining and hydro power project (tax incentive is dependent on negotiation).
The lump-sum tax is imposed on small and medium business operators that are not registered in the value-added tax (VAT) system and companies that did not prepare Lao accounting books. The lump-sum tax is paid in lieu of the PT, based on an agreement with the tax office; consequently, the lump-sum tax is regarded as a tax within the PT category.
Local income taxes
There are no provincial or local income taxes in Lao PDR.