PT is determined on a calendar-year basis.
Tax returns and payment of tax
Employers must withhold the PIT payable from their employees' salaries each month and submit the PIT declaration and payment before the 20th (previously 15th) day of the following month.
Employees are now required to obtain a Tax Identification Number (TIN) and file annual PIT returns by 31 March of the following year. If any additional PIT should be paid, the PIT should be paid within 15 working days from the date that the tax authority issues the tax payment form. If the total monthly PIT paid is more than the annual PIT, the tax authority should refund the excess PIT within 10 working days.
For individuals who are subject to PT, the tax return is due, and the tax is payable, based on the agreement with the tax authority.
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 individuals subject to PT after the annual tax filing and issue tax payment certificates to the individuals after they complete their audit process.
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.