PT is determined on a calendar-year basis.
Tax returns and payment of tax
Employers must withhold the PIT payable from their employees' salaries each month and submit the PIT declaration and payment before the 15th day of the following month.
For individuals who are subject to PT, the annual tax return is due by 10 January of the subsequent year. Submission of the final tax return will generally be followed by an audit by the Tax Department.
PT is payable quarterly in advance, with a final payment after year-end. The first three payments must be paid by 10 April, 10 July, and 10 October of the current tax year. The final payment is due with the submission of the final tax return by 10 January of the subsequent year. The quarterly payments are either based on the actual or prior year's PT (or expected tax for the current year). Any excess PT payment can be carried forward to the subsequent year.
Some of the penalties are as follows:
- Late filing and payment of taxes: Fine of 0.1% per day of delay based on the tax payable. However, the fine shall not exceed the amount of tax payable.
- Under-reporting of income; underpayment of taxes; failure to issue invoices or issuing false invoices:
- First offence – Fine at 20% of the tax payable
- Second offence – Fine at 40% of the tax payable
- Third offence – Fine at 60% of tax payable; permanent closure of business and publication of the offence
- Failure to maintain accounts; failure to file a tax return; refusal to allow the tax department to conduct an inspection; refusal to submit documents regarding the tax calculation: Calculation of profit tax based on the FWHT rates; in addition to the following fines:
- First offence – Fine at 30% of the tax payable
- Second offence – Fine at 60% of the tax payable
- Third offence – Fine at 100% of tax payable; permanent closure of business and publication of the offence
- Failure to pay tax payable as per the tax assessment notice: If the tax payable is not paid within 15 days after the date specified in the notice, the fine is 3% of the amount payable for the first notice; 6% for the second notice; and 10% for the third notice.
Tax audit process
In practice, the tax authorities will audit the individuals subject to PT after the annual tax filing and issue tax payment certificates to the individuals after they complete their audit process.
Statute of limitations
Generally, the tax department has the right to audit within three accounting years.
Topics of focus for tax authorities
There are no areas of special focus in tax examinations in Lao PDR.