Lao PDR

Individual - Taxes on personal income

Last reviewed - 06 February 2020

All sole traders and independent contractors are subject to Profit Tax 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 withholding tax

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

Interest withholding tax

Interest on bank deposits are exempt from income tax.

Local income taxes

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