Income tax in Laos
Taxation Researcher | August 10, 2020
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 2020 |
|
| TAXABLE INCOME, LAK (US$) | TAX RATE |
| Up to 1.3 million (US$152) | 0% |
| 1.3 million – 5 million (US$585) | 5% on band over US$152 |
| 5 million – 15 million (US$1,754) | 10% on band over US$585 |
| 15 million – 25 million (US$2,924) | 15% on band over US$1,754 |
| 25 million – 65 million (US$7,602) | 20% on band over US$2,924 |
| Over 65 million (US$7,602) | 25% on all income over US$7,602 |
INCOME TAX |
|
| TAXABLE INCOME, LAK (US$) | TAX RATE |
| Up to 1 million (US$117) | 0% |
| 1 million - 3 million (US$351) | 5% on band over US$117 |
| 3 million - 6 million (US$702) | 10% on band over US$351 |
| 6 million - 12 million (US$1,404) | 15% on band over US$702 |
| 12 million - 24 million (US$2,807) | 20% on band over US$1,404 |
| 24 million - 40 million (US$4,678) | 25% on band over US$2,807 |
| Over 40 million (US$4,678) | 28% on all income over US$4,678 |
Profits Tax
Profits tax is levied on the income of sole proprietors at progressive rates.
PROFIT TAX |
|
| TAXABLE INCOME, LAK (US$) | |
| Up to 3,600,000 (US$421) | |
| 3,600,000 - 8 million (US$936) | |
| 8 million - 15 million (US$1,754) | |
| 15 million - 25 million (US$2,924) | |
| 25 million - 40 million (US$4,678) | |
| Over 40 million (US$4,678) | |
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 20%. Income-generating activities are deductible when computing for the taxable income.