Income tax in Laos

July 12, 2017

INDIVIDUAL TAXATION

Individuals are taxed on their income from sources in Laos. Married couples are taxed separately.

Individuals pay either income tax or profits tax, depending on the classification of the source of income.

INCOME TAX

Income tax is levied on the following income: (1) income from salary, general labor wages, bonuses, allowances, and other benefits received in cash or in kind, (2) dividends, profits from the sale of shares, interest income, guarantee fees, (3) income from immovable property (lease of land, houses, and other property), and capital gains realized from selling real property, and (4) royalty income from patents, copyright, trademarks or other intellectual property.

Income tax is levied at progressive rates.

INCOME TAX

TAXABLE INCOME, LAK (US$)
TAX RATE
Up to 1 million (US$123)
0%
1 million – 3 million (US$370)
5% on band over US$123
3 million – 6 million (US$739)
10% on band over US$370
6 million – 12 million (US$1,479)
15% on band over US$739
12 million – 24 million (US$2,958)
20% on band over US$1,479
24 million – 40 million (US$4,929)
25% on band over US$2,958
Over 40 million (US$4,929)
28% on all income over US$4,929

Profits Tax

Profits tax is levied on the income of sole proprietors at progressive rates.

PROFIT TAX

TAXABLE INCOME, LAK (US$)
TAX RATE
Up to 3,600,000 (US$444)
0%
3,600,000 – 8 million (US$986)
5%
8 million – 15 million (US$1,848)
10%
15 million – 25 million (US$3,081)
25%
25 million – 40 million (US$4,929)
20%
Over 40 million (US$4,929)
24%

RENTAL INCOME
Income from property is taxed separately from other income. Rental income from leases of houses, lands and other assets is taxed at a flat rate of 15%. Income-generating expenses are deductible when computing for the taxable income.

CAPITAL GAINS
Income tax is levied on capital gains derived from selling real property.

CORPORATE TAXATION

PROFITS TAX

Profits tax is levied on the following income: (1) industry and handicraft businesses, (2) exploitation of natural resources, (3) import-export businesses, (4) wholesale and retail trade businesses, (5) income from general service provision, and (6) income of independent professionals.

Profits tax is levied at a flat rate of 35%. Income-generating activities are deductible when computing for the taxable income.

PROPERTY TAX

Land Tax

Land taxes vary depending on the location and the type of the land. The calculation is based on both the location and the size of the land, which is levied at annual rates per square meter. Land tax is payable in the first quarter of the relevant tax year.

CORPORATE TAXATION

PROFITS TAX

Profits tax is levied on the following income: (1) industry and handicraft businesses, (2) exploitation of natural resources, (3) import-export businesses, (4) wholesale and retail trade businesses, (5) income from general service provision, and (6) income of independent professionals.

Profits tax is levied at a flat rate of 24%. Income-generating activities are deductible when computing for the taxable income.

 

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