Social security contributions
The government is encouraging all enterprises (including individuals) to register (including their employees) in the Social Security Scheme.
Both the employer and employee must contribute to the social security fund. The social security contributions are as follows:
- 6% of the gross remuneration must be contributed by the employer.
- 5.5% of the gross remuneration must be contributed by the employee.
Social security contributions are paid at the same time as the PIT based on gross remuneration and are deductible when calculating PIT. Although the rate of the social security contribution is 6% and 5.5%, respectively, the total base amount to be calculated is capped at LAK 4.5 million.
Expatriates who work in Lao PDR for more than 12 months are required to be registered in the social security scheme in Lao PDR.
Value-added tax (VAT)
The standard VAT rate is 7%.
See the Other taxes section in the Corporate tax summary for more information.
Gifts with a value of less than LAK 1.3 million are exempt from gift tax. The rate is 5% if the value is over than LAK 1.3 million.
The land tax is based on both the location and the size of the land and is levied at annual rates per square metre.
Excise tax is levied on consumers of certain imported goods, domestic produced goods, and services within the territory of Lao PDR. The rates range from 3% to 100%. Importers file and pay excise tax at the time of filing the customs declarations at the customs checkpoints. Domestic producers and service suppliers shall file their monthly excise tax returns no later than the 20th (previously 15th) day of the following month.
There are no transfer taxes in Lao PDR.
The stamp taxes in Lao PDR range from LAK 2,000 to LAK 20,000, depending on the types of documents.
Under the Lao Tax Law, environmental tax is imposed on companies operating a business involving certain prescribed activities, which are considered to cause pollution; damage the health and lives of any human, animal, or plant; or disrupts the balance of the ecosystem. The taxable amount and tax rate depend on the business activity.
Fees and administrative charges
Under the Lao Tax Law, government sectors can collect fees for issuing fiscal licences, business licences, permits, visas, advertisement boards, broadcasting rights, and other services. The charges and service fees are set periodically by Presidential Decree.