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Lao PDR
Individual - Taxes on personal income
Last reviewed - 06 February 2026All sole traders and independent contractors are subject to profit tax (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 personal income tax (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.
Profit tax (PT) rates
The PT rates is set at 20% for enterprises.
For legal entities in a group of companies that are member of a multinational corporation, if the actual tax rate paid by the legal entity is less than 15% according to the international tax rule, the legal entity must pay the minimum domestic profit tax in full.
Personal income tax (PIT) rates
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 | 2,500,000 | 2,500,000 | 0 | 0 | 0 |
| 2,500,000 | 5,000,000 | 2,500,000 | 5 | 125,000 | 125,000 |
| 5,000,000 | 15,000,000 | 10,000,000 | 10 | 1,000,000 | 1,125,000 |
| 15,000,000 | 25,000,000 | 10,000,000 | 15 | 1,500,000 | 2,625,000 |
| 25,000,000 | 65,000,000 | 40,000,000 | 20 | 8,000,000 | 10,625,000 |
| 65,000,000 | and above | - | 25 | - | - |
* Lao kip
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 | 30,000,000 | 30,000,000 | 0 | 0 | 0 |
| 30,00,000 | 60,000,000 | 30,000,000 | 5 | 1,500,000 | 1,500,000 |
| 60,000,000 | 180,000,000 | 120,000,000 | 10 | 12,000,000 | 13,500,000 |
| 180,000,000 | 300,000,000 | 120,000,000 | 15 | 18,000,000 | 31,500,000 |
| 300,000,000 | 780,000,000 | 480,000,000 | 20 | 96,000,000 | 127,500,000 |
| 780,000,000 | and above | - | 25 | - | - |
Dividend withholding tax (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.
Interest income on loan from non-bank and financial institutions, income from guarantees under contracts or other is 10%
Local income taxes
There are no provincial or local income taxes in Lao PDR.
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