Lao PDR

Individual - Taxes on personal income

Last reviewed - 08 July 2020

All sole traders and independent contractors are subject to PT on their business income derived in Lao PDR.

Both Lao and foreign individuals earning income in Lao PDR in the form of salaries, benefits in kind, and other remuneration are subject to PIT.

Expatriates who work in Lao PDR and obtain remuneration in Lao PDR are obligated to pay PIT, regardless of the period of their employment and stay in Lao PDR. Foreigners who stay in Lao PDR for a period or periods aggregating more than 183 days in any one-year period and obtain remuneration from a foreign country are obligated to pay PIT.

Personal tax rates

Profit tax (PT)

The PT rates are as follows:

  • 1% of gross revenue for manufacturing on agriculture, industry, and other production industries.
  • 2% of gross revenue for commerce.
  • 3% of gross revenue for services.

PIT rate

The monthly PIT rates for both Lao and foreign individuals are as follows:

Monthly income threshold (LAK) Basis of computation (LAK) Tax rate (%) PIT of each threshold (LAK) Total PIT (LAK)
From To
0 1,300,000 1,300,000 0 0 0
1,300,001 5,000,000 3,700,000 5 185,000 185,000
5,000,001 15,000,000 10,000,000 10 1,000,000 1,185,000
15,000,001 25,000,000 10,000,000 15 1,500,000 2,685,000
25,000,001 65,000,000 40,000,000 20 8,000,000 10,685,000
65,000,001 and above - 25  - -

The annual PIT rates for both Lao and foreign individuals are as follows:

Annual income base (LAK) Basis of computation (LAK) Tax rate (%) PIT of each threshold (LAK) Total PIT (LAK)
From To
0 15,600,000 15,600,000 0 0 0
15,600,001 60,000,000 44,400,000 5 2,220,000 2,220,000
60,000,001 180,000,000 120,000,000 10 12,000,000 14,220,000
180,000,001 300,000,000 120,000,000 15 18,000,000 32,220,000
300,000,001 780,000,000 480,000,000 20 96,000,000 128,220,000
780,000,001 and above - 25 - -

Dividend WHT

Dividends (including share in partnership income) received are subject to dividend WHT at the rate of 10%.

Interest WHT

Interest on bank deposits are exempt from income tax.

Local income taxes

There are no provincial or local income taxes in Lao PDR.