Tax In Laos

A Contractor's Guide to Taxes : 

One of the most consistently challenging aspects of contracting in Laos is complying with the country’s tax system. As well as paying tax in Laos, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income: 

If you’re working in Laos under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Laos for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Laos, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Laos through PAYE is left with the prospect doing everything themselves.

Do you know much about Lao Tax Law? Does Laos have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Laos can range from 0 to 24 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Calculator: 

If you are a contractor and want a calculation on your tax and net retention in Laos, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax : 

Contractors in Laos are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Lao umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Lao taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Lao tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax: 

We work with numerous umbrella companies in Laos, many of whom are experts in tax and immigration laws. If you have any questions about tax in Laos, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Lao work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Laos but without the overhead of directly dealing with the Lao tax authorities. Get in touch with us today for some reliable advice on tax in Laos!

When Do You Need to Lodge Your Tax Return?: 
15th day of the following month
Tax Filing Deadline : 
15th day of the following month
Can you file it online? : 
No
Currency: 
Lao Kip (LAK)
Tax-free Threshold in: 
LAK1,000,000
Grossed Income: 
0 - 1,000,000
Tax Rate: 
0%
Grossed Income: 
>1,000,000 - 3,000,000
Tax Rate: 
5%
Grossed Income: 
>3,000,000 - 6,000,000
Tax Rate: 
10%
Grossed Income: 
>6,000,000 - 12,000,000
Tax Rate: 
12%
Grossed Income: 
>12,000,000 - 24,000,000
Tax Rate: 
15%
Grossed Income: 
>24,000,000 - 40,000,000
Tax Rate: 
20%
Grossed Income: 
>40,000,000
Tax Rate: 
24%
How long does it take to set up: 
67 days
How much does it cost: 
LAK698,000
Is it easy? : 
Starting a Business Rank: 164/190 (Source: World Bank)
How to File Taxes in: 

Your employer will withhold, declare and pay taxes monthly, on your behalf, before the 15th day of the following month.

Notes: 

Rates for Expatriates Employed by Concession Project Companies

  • An expatriate who signed an indefinite-term employment contract with the Government of Laos before 1 March 2011 (when the Presidential Ordinance No. 001 was issued) is entitled to an employment income tax rate of 10% until the expiry of the contract.
  • An expatriate who signed a fixed term contract before 1 March 2011 with the Government of Laos is entitled to an employment income tax rate of 10% during the term of employment.

Deductions: Individuals receiving salary income are entitled to deduct LAK1 million from their taxable income as an allowance for living costs.

Does the 183 day rule apply in: 

No

When do you become a tax resident in: 

There is no definition of residence for income tax purposes in Laos.

Am I taxed on my global income in: 

An individual who resides in Laos for 180 days or more during the tax year is taxed on both their global and Laos-source income (unless the individual is a foreigner and a treaty applies).

Client comment

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