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Lao PDR
Overview
Last reviewed - 06 February 2026Lao 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. Recently the Bank of Lao PDR issue the regulation to accept Chinese Yuan as a official currency.
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 completed. However, according to the COVID-19 zero policy of China, the connection from Lao PDR to China is closed, so this railway currently supports only the routes in Lao PDR.
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 Laos
PwC Laos 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 (%) |
The standard corporate income tax rate for enterprises is 20. For legal entities within multinational groups, if the actual tax rate paid by such a legal entity is less than 15 based on international tax rules, they must pay the minimum domestic profit tax in addition to the full amount. |
| Corporate income tax (CIT) due dates | |
|---|---|
| CIT return due date |
The corporate income tax return is due twice as follows: First return: on or before 20 July of the year Second return: on or before 31 December of the year |
| CIT final payment due date |
By March of the following year after the entity submitted the annual financial statement for tax audit. |
| CIT estimated payment due dates |
By March of the following year after the entity submitted the annual financial statement for tax audit. |
| Personal income tax (PIT) rates | |
|---|---|
| Headline PIT rate (%) |
Progressive rate range from 0 - 25 |
| Personal income tax (PIT) due dates | |
|---|---|
| PIT return due date |
The monthly return is due on or before the 20th of the following month. The annual return is due on or before 31 March of the following year (current practice is not strictly enforced). |
| PIT final payment due date |
The monthly return is due on or before the 20th of the following month. The annual return is due on or before 31 March of the following year (current practice is not strictly enforced). |
| PIT estimated payment due dates |
Payable monthly in advance due on the 20th day of the following month. For Annual: The employee has obligation to summarise all income during the year, then submit and make a tax payment by 31 March of the following year. |
| Value-added tax (VAT) rates | |
|---|---|
| Standard VAT rate (%) |
10 |
| Withholding tax (WHT) rates | |
|---|---|
| WHT rates (%) (Dividends/Interest/Royalties) |
Resident: 10 / 10 / 5 Non-resident: 10 / 10 / 5 |
| Capital gains tax (CGT) rates | |
|---|---|
| Headline corporate capital gains tax rate (%) |
2% for sale price for share capital, use of right. The exemption is for capital gain from sale stock in Lao Securities Exchange. |
| Headline individual capital gains tax rate (%) |
2% for sale price for share capital. |
| Net wealth/worth tax rates | |
|---|---|
| Headline net wealth/worth tax rate (%) |
NA |
| Inheritance and gift tax rates | |
|---|---|
| Headline inheritance tax rate (%) |
NA |
| Headline gift tax rate (%) |
5 |
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