Lao PDR

General Information     |      Tax measures – Direct and Indirect     |     Economic stimulus measures     |     Custom measures     |     Other measures and sources

Return to homepage  |  Last updated: 17 June, 2020

Lao government is attentively assisting and creating a favorable condition during this coronavirus crisis to a wide range of business units, in a form of companies and organizations, by implementing tax breaks or exemptions for a certain type of taxes and business size and delaying tax payments. The world bank supports Lao PDR the stimulus package of USD 18 million. Apart from that, the Lao government also incorporated with the Bank of Lao PDR and together with commercial banks to perform debt reclassifications and provide incentives on interest rates.

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Ministry of Finance has issued a new Notice (No. 1027/MoF, dated 10 April 2020) on Tax Implementation in accordance with the Decision on Policy and Measure Determination to Minimize the Negative Impacts of COVID-19 Pandemic.

• Implement the PIT exemptions for employees both public and private sectors who receive a monthly salary below 5,000,000 LAK within the period of 3 months (April-June 2020). For employees who earn a monthly salary above 5,000,000 LAK are to be calculated by exempting first 5,000,000 LAK of the earned salary and deducting the remaining amounts according to the tax rates determined in article 39 of Law on Income Tax.
• PIT of April 2020 shall be submitted no later than 20 May 2020;
• PIT of May 2020 shall be submitted no later than 20 June 2020;
• PIT of June 2020 shall be submitted no later than 20 July 2020.
• Implement profit tax exemptions for Micro-Medium Enterprises as stipulated in article 29, clause 2 of Law on Income Tax.

The Ministry of Finance, Tax Department, has published a further notice on the Calculation of Personal Income (Payroll) Tax – PIT No. 1128/TD, dated 24 April 2020.

• Implement the exemptions of PIT for employees both public and private sectors who receive a monthly salary below 5,000,000 LAK within a 3-month period (April to June 2020) in accordance with the Decision of the Prime Minister No. 31/NA, dated 2 April 2020, the method of calculation is displayed as follows:
• In case of employees who receive a monthly salary below 5,000,000 LAK:
• This refer to who earns income in the first 2 levels of tax deductions shown in the table below, will be computed as the following:
• Below 1,300,000 LAK is categorized in level 1 of tax deductions, with the rate of 0% (Exempted according to the law);
• From 1,300,000 LAK to 5,000,000 LAK is categorized in level 2 of tax deductions, with the rate of 5% (Exempted according to the Decision No. 31/NA).
• For employees who earn a monthly salary above 5,000,000 LAK are to be calculated by exempting the first 5,000,000 LAK of the earned salary and deducting the remaining amounts with the rate of 10% and above, respectively.

The Lao Securities Commission has published a Notice in relation to Policy and Measures of Implementation for the Capital Markets to Reduce the Negative Impacts of COVID-19 Outbreak No. 05/LSC, dated 21 April 2020.
For Lao Securities Exchange (LSX)

• Stimulate the publications of Lao Securities Exchange (LSX) through mass media;
• Pay close attention to the trading trends and status towards investor behavior;
• Incorporate with the securities companies to create a contingency plan.
  

Tariff Exemptions

• Exempt tariffs and relevant fees of the imported goods that will be used in the operations of containment, prevention and full response to the COVID-19 Pandemic.
  

• Postpone the payment of management annual fee for the year 2019 from the first quarter (Q1) to the second quarter (Q2) of the following year;
• Extend the period of the reporting obligation of a securities company to 45 working days, counting from the due date of submission and disclosure as usual onwards.

Audit Firm

• Postpone the payment of management annual fee for the year 2019 from January 2020 to June 2020;
• Extend the period of the reporting obligation of an audit firm to 45 working days, counting from the due date of submission and disclosure as usual onwards.

Appraisal Company

• Postpone the payment of management annual fee for the year 2019 from the first quarter (Q1) of 2020 to the second quarter (Q2) of 2020;
• Extend the quarterly and annually reporting obligation to 45 working days, counting from the due date of submission and disclosure as usual onwards.

Credit Rating Agency

• Postpone the payment of management annual fee for the year 2019 from the first quarter (Q1) of 2020 to the second quarter (Q2) of 2020;
• Extend the quarterly and annually reporting obligation to 45 working days, counting from the due date of submission and disclosure as usual onwards.

Bank of Asset Management

• Postpone the payment of management annual fee for the year 2019 from the first quarter (Q1) of 2020 to the second quarter (Q2) of 2020.
• Securities Intermediary must have contingency plan to ensure the business continuance.

For a Company Listed on the Lao Securities Exchange

• Exempt the annual fee charge for the year 2019, amount of 10,000,000 LAK for the company listed on the Lao Securities Exchange (Exempt 1 year for the year 2020, in case any company that already paid this management fee for the year 2020 will be exempted in 2021);
• Extend the reporting and disclosure period of the financial statements for the year 2019 of the company which are negatively affected by the COVID-19 pandemic from 120 days to 150 days after the closing period onwards or as appropriate based on the circumstance.
  

Tax: Solida Bouddavanh- sbouddavanh@kpmg.com
Legal: Pathumphone Ngonoulalath – pngonoulalath@kpmg.com