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Please direct all inquiries regarding Laos to Nhung Nguyen of the Hanoi, Vietnam, office of EY.
Vientiane GMT +7
EY
Kolao Tower I, 6th Floor
23 Singha Road
Vientiane Laos
Executive and immigration contacts
Nhung Nguyen
+84 (24) 3831-5100 (resident in Hanoi, Vietnam) Fax: +84 (24) 3831-5090
Quoc Bao Luu
A. Income tax
Email: nhung.hong.nguyen@vn.ey.com
+856 21-455-077
Email: quoc.b.luu@la.ey.com
Who is liable. Under Income Tax Law No. 67/NA, dated 18 June 2019, income tax is imposed on the income of individuals and organizations that generate income in Laos. The following persons, among others, must pay income tax in Laos:
• Persons who generate income in Laos
• Individuals resident in Laos who work and generate income in a foreign country, unless an applicable double tax treaty provides otherwise
• Lao employees who work in embassies, consular offices or international organizations in foreign countries and earn income in Laos
• Foreigners who work in Laos and receive salary in Laos
• Foreigners who work in Laos and receive salary in foreign countries, if they live in Laos for 183 consecutive days, or nonconsecutive days but over 183 days within the year, unless an applicable double tax treaty provides otherwise
Income subject to tax
Employment income. Employment income includes salaries, wages, bonuses, overtime payments, salary advances, honoraria, allowances for members of boards of management and other benefits in cash or in kind.
Business income. Under Income Tax Law No. 67/NA, dated 18 June 2019, profit tax is a direct tax imposed on the profits of enterprises, including individuals who engage in business activities. For the rates of profit tax, see Rates
Other income. The following types of income are also subject to tax:
• Dividends and profits or other benefits paid to shareholders or partners and profits from the sale of shares
• Interest income from loans, commissions from brokerage or agency, and earnings from secured transactions or other binding obligations
• Income from lotteries in cash or in kind
• Income from prizes (gifts) in cash or in kind over LAK1,300,000
• Income from leases such as leases of land, houses, vehicles, constructions, machines or other property
• Income from intellectual property such as patents, copyrights, trademarks or other rights
• Income from the sale or transfer of land, constructed items or land with construction
Exempt income. The following are significant types of exempt income:
• Salary of up to LAK1,300,000
• Profit from the sale of shares on the Lao Securities Exchange
• Allowance for spouse or child of up to 18 years old, maternity, sickness, occupational accident, one-time allowances, pensions, per diems for students, and additional work and overtime work of people earning basic income not more than LAK2 million
• Dividends paid to partners or shareholders of companies listed on the Lao Securities Exchange
• Income from the provision of public services, such as artistic activities, sports and other activities approved by relevant agencies
• Interest on deposits and on government bonds or debentures
• Individual or corporate life and property insurance payments
Personal deductions and allowances. Amounts withheld for pension funds and certain other welfare funds are deductible.
Rates
Employment income. The following progressive tax rates are imposed on employment income.
Business income. The following are the progressive rates of profit tax, imposed on micro enterprises, including freelancers who engage in business activities.
Spouse (SP-B3). Spouse (SP-B3) visas are issued to foreigners who marry Lao citizens in accordance with the government’s regulations and procedures.
Tourist (T-B3) Tourist (T-B3) visas are issued to foreign visitors for the purpose of holiday and tourism in Laos.
Short-term (NI-B3) Short-term (NI-B3) visas are issued to the following:
• Foreigners who are authorized to join a meeting, training or temporary study tour in Laos
• Foreigners who want to visit parents, cousins and friends or collect information for investment, trading and other purposes that are legal and follow the regulations of Laos
Long-term (I-B3). Long-term (I-B3) visas are issued to the following:
• Foreigners having a mission to protect and build the nation, including people who are beneficial to Laos and intend to have long stay in Laos
• Foreigners who intend to have long stay in Laos and deposit at least USD20,000 in a bank account of a bank in Laos if they intend to stay in Laos for six months or at least USD40,000 if they intend to stay in Laos for a year
Permanent (P-B3). Permanent (P-B3) visas are issued to foreigners who are authorized to have permanent stay in Laos.
Transit (TR-B3). Transit (TR-B3) visas are issued to foreign visitors who travel through Laos to a third country.
Visa application procedures. Embassies or general consulates of Laos in foreign countries can approve tourist visas, short-term visas and transit visas for foreigners who want to enter and leave Laos not more than two times. Other types of visas must be first approved by the Ministry of Foreign Affairs.
The immigration authority at the International Checkpoint Unit in the country can approve tourist visas, short-term visas and transit visas for foreigners who want to enter and leave Laos only one time. Other types of visas must be first approved by Ministry of Foreign and Affairs.
Documentary requirements. An applicant must submit the following documents to obtain a visa:
• An application form completed and signed by the applicant
• Two recent 4 cm x 6 cm photographs
In addition, the individual must have a passport with a remaining validity of at least six months.
F. Work permits
To work in Laos, a foreign national must obtain a labor visa and apply for a work permit and foreign identity card.
Labor units that receive authorization to import foreign labor must register and apply for a work permit within one month from the date of receiving authorization.
A work permit is issued at the same time as a labor visa and expires in accordance with the employment contract.
The duration of temporary work permits may not exceed three months for labor imported for a probationary period, for monitoring and evaluation of projects or for the installation and reparation of machinery in accordance with an equipment sales contract.
Work permits are issued for a period of not more than 12 months and an extension may be requested for a period of not more than 12 months. The total working period may not exceed five years.
The employer must submit an application dossier to the Labor and Social Welfare Department. The application dossier must contain the following items:
• Letter requesting the issuance of a work permit for the employee
• Application form for an identification card
• Invitation letter to the foreign employee
• Copy of passport
• Copy of labor visa
Any document certified in a foreign country must be translated into Lao and legally notarized.
G. Stay permits
At the same time of a labor visa application, the company will need to submit documents to apply for a stay permit.
Stay permits are issued for a period of not more than 12 months, and an extension may be requested for a period of not more than 12 months. The total working period may not exceed five years.
The employer must submit to the Foreigner Administration Police Department, Ministry of Public Security, an application dossier, which contains the same documents as those for the work permit application.
H. Family and personal considerations
Family members. The spouse of a multiple-entry visa and work permit holder does not automatically receive the same type of authorization. A separate application must be filed jointly with the expatriate’s application.
Driver’s permits. A foreign national with a home country driver’s license can apply for an equivalent driver’s license in Laos.