Both Lao and foreign individuals earning income in Lao PDR in the form of salaries, benefits in kind, and other remuneration are subject to personal income tax (PIT) at the same progressive rates.
Expatriates who work in Lao PDR and obtain remuneration in Lao PDR or in a foreign country are obligated to pay PIT in Lao PDR, regardless of the period of time of their employments and stays in Lao PDR.
Personal income tax rates
The progressive PIT rates in Lao PDR are as follows:
|Monthly income threshold (LAK)
||Basis of computation (LAK)
||Tax Rate (%)
||PIT of each threshold (LAK)
||Total PIT (LAK)
Expatriate PIT rates
Expatriates employed by concession project companies
Whether an expatriate is subject to the current progressive PIT rates (0% to 24%) or not depends on the point of time of employment and the term of employment.
If the expatriate signed an employment contract before issuance of the Presidential Ordinance No.001 (1 March 2011) and the employment contract is an indefinite-term employment contract, the expatriate is entitled to enjoy a PIT rate of 10% until the concession agreement expires. If the employment contract is a fixed-term employment contract, the expatriate is entitled to enjoy the 10% rate only during the employment term. If the employment contract expires and is renewed on or after 1 March 2011, one shall have to pay PIT at the progressive rates (0% to 24%).
If the employment contract is signed on or after issuance of the Presidential Ordinance No.001, the current progressive PIT rates (0% to 24%) shall be applied.
Expatriates employed by companies investing in general investment activities
The expatriates employed by companies investing in general investment activities shall have to pay PIT under the current progressive PIT rates (0% to 24%) regardless of when the employment contracts are signed. In other words, for expatriates employed by companies investing in general investment activities, it does not matter when the employment contracts are signed (before or after the Presidential Ordinance No.001); they shall have to pay PIT under the current progressive rates (0% to 24%).