Social security contributions
The Social Security Decree applies to:
- employees of state-owned enterprises, private enterprises, and joint enterprises
- enterprises that employ ten or more employees, or
- an enterprise that has less than ten employees, but is a branch of a larger enterprise.
Both the employer and employee must contribute to the social security fund. The social security contributions are as follows:
- 6% of the gross remuneration must be contributed by the employer.
- 5.5% of the gross remuneration must be contributed by the employee.
Social security contributions are paid at the same time as the PIT based on gross remuneration and are deductible when calculating PIT. Although the rate of the social security contribution is 6% and 5.5%, respectively, the total base amount to be calculated is capped at LAK 4.5 million. This was increased from LAK 2 million.
Expatriates who work in Lao PDR for more than 12 months are required to be registered in the social security scheme in Lao PDR.
Value-added tax (VAT)
The standard VAT rate is 10%.
See the Other taxes section in the Corporate summary for more information.
Land taxes vary depending on the location and the type of the land (e.g. land for construction, agriculture). The calculation of the land tax is based on both the location and the size of the land and is levied at annual rates per square meter. Land tax is payable in the first quarter of the relevant calendar year.
Excise tax applies to the import and sale of certain luxury products. Excisable goods include alcohol, beer, cigarettes, perfume, cosmetics, motor vehicles, soft drinks, mineral water, and many types of electrical equipment. Excise tax rates range from 5% to 90%.
Under the new Tax Law No. 70/NA dated 15 December 2015, the excise tax rates on vehicles range from 25% to 90%. The new tax law became effective on 24 May 2016.
There are no transfer taxes in Lao PDR.
The stamp taxes in Lao PDR range from LAK 2,000 to LAK 20,000, depending on the types of documents.