There is no definition of residence or permanent establishment (PE) provided in the Lao Tax Law, as well as the Value Added Tax Law (VAT Law).
According to the double tax treaties (DTTs) of Lao PDR, ‘permanent establishment’ generally means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
It is understood that the reason for having no PE definition in the law is because there is foreign withholding tax (FWHT) levied on foreign entities conducting their business activities in Lao PDR. For more information about the FWHT, please see the Withholding taxes section.
Currently, the government is reassessing tax privileges and DTTs that they have offered to some businesses/signed with some countries in the past, and they have planned to cancel some; however, this is not yet final.