All salary and non-cash benefits in kind are taxable. Overtime pay of employees who have base salary below LAK 2 million per month is exempt from PIT.
There is no separate tax on capital gains in Lao PDR. However, sales of shares are subject to income tax at the rate of 2% of the selling price.
Income derived from the sale or transfer of real property is subject to income tax at the following rates:
- In case of land for agriculture purposes: 1% of the selling price.
- In all other cases: 2% of the selling price.
Dividends (including shares in partnerships) received are taxed at 10% for both residents and non-residents.
Interest derived from deposit money in bank accounts and bonds is not subject to PIT.
Rental income is taxed at 10%.
Royalties from intellectual property (IP) are taxed at 5%.
Unrealised exchange gains/losses
Unrealised exchange gains are not taxable and losses are not deductible.
Partnership income is generally taxed like companies, and the partnership income distributed is treated as dividends (see the Income determination section in the Corporate tax summary for more information.)