Lao PDR

Overview

Last reviewed - 06 February 2020

Lao People's Democratic Republic (PDR), a landlocked country in Southeast Asia, is bordered by Myanmar and China to the northwest, Vietnam to the east, Cambodia to the south, and Thailand to the west. Lao PDR is ruled by a single party Communist government. It was a former French colony that gained independence in 1954. The population is approximately 7 million, with most living in rural areas. Lao is the official language, with French still utilised in some parts of the capital of Vientiane. Thai is also common along the border areas and in the capital. The official currency of Lao PDR is the kip (LAK), but the Thai baht (THB) and United States dollar (USD) are also common in many border areas.

Most of the country is mountainous and thickly forested, with the Mekong River forming a large part of the western boundary with Thailand and serving as a major transportation route. Transportation infrastructure outside of the capital is getting better. The government has focused on infrastructure improvements as part of the Millennium Development Goals by 2020. The government has announced the joint construction with China of a high-speed rail line between China and Thailand to link Lao PDR with the transportation hubs in these countries. Construction of the project started on 25 December 2016 and is expected to take five years to complete.

The major industries in Lao PDR are mining, hydro power, agriculture, and light manufacturing. There has been significant foreign investment in the hydro power and mining industries. Lao PDR's major trading partners (i.e. foreign investors) are Thailand, China, and Vietnam.

The government has instituted several measures to encourage foreign investments and increase private investment. The Lao Securities Exchange opened on 10 October 2010 and the first day of trade was 11 January 2011. As of 31 December 2016, there are ten listed companies. Lao PDR is a member of the Association of Southeast Asian Nations (ASEAN) and the World Trade Organization (WTO).

PwC Lao has had an office in Vientiane since 1996 employing over 100 local and expatriate professionals in tax/legal and audit services. Our tax and legal practice in Lao PDR are comprised of experienced local professionals and a strong network of international consultants offering a wealth of practical experience and knowledge in relation to the laws and regulations of Lao PDR.

Quick rates and dates

Corporate income tax (CIT) rates
Headline CIT rate (%)

20 (previously 24)

Corporate income tax (CIT) due dates
CIT return due date

20 January (previously 10 January) and 31 March (for financial statements)

CIT final payment due date

15 working days after tax assessment

CIT estimated payment due dates

Due on 20 July and 20 January of following year in advance (previously payable quarterly in advance on 10 April, 10 July, 10 October, and 10 January of following year)

Personal income tax (PIT) rates
Headline PIT rate (%)

25 (previously 24)

Personal income tax (PIT) due dates
PIT return due date

Monthly: 20th (previously 10th) day of the following month;

Annual: 31 March (previously none)

PIT final payment due date

15 working days from the date of receipt of tax payment form from tax authority (previously none)

PIT estimated payment due dates

Payable monthly in advance due on the 20th day of the following month

Value-added tax (VAT) rates
Standard VAT rate (%)

10

Withholding tax (WHT) rates
WHT rates (%) (Div/Int/Roy)

Resident: 10 / 10 / 5;

Non-resident: 10 / 10 / 5

Capital gains tax (CGT) rates
Corporate capital gains tax rate (%)

NA

Individual capital gains tax rate (%)

NA

Net wealth/worth tax rates
Headline net wealth/worth tax rate (%)

NA

Inheritance and gift tax rates
Inheritance tax rate (%)

NA

Gift tax rate (%)

NA

NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

NP stands for Not Provided (i.e. the information is not currently provided in this chart)

All information in this chart is up to date as of the 'Last reviewed' date on the corresponding territory Overview page. This chart has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this chart, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.