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Lao PDR
Individual - Taxes on personal income
Last reviewed - 20 August 2024All 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.
Personal tax rates
Profit tax (PT) rates
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.
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 | 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 | - | - |
* 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 | 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 (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.
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