PT is determined on a calendar-year basis.
According to the Lao Tax Law, the annual tax return is due by 20 January (previously 10 January) of the subsequent year and the filing of the financial statements is due by 31 March of the following year. Submission of the financial statements will generally be followed by an audit by the Tax Department.
Payment of tax
PT is payable twice a year in advance, with a final payment (if any) after the tax assessment. The first two payments must be paid by 20 July of the current tax year and 20 January of the subsequent year. The final payment (if any) is due 15 working days after the tax assessment. The first two 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.
- Under reporting of income or underpayment of taxes:
- 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
Tax audit process
In practice, the tax authorities will audit the company after the annual tax filing and issue a tax payment certificate to the company after they complete their audit process. Most large companies (i.e. assets with more than LAK 5 billion) are audited.
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.