Tax
A 2019 tax reform package with VAT since raised to 10%
The Income Tax Law and Tax Administration Law of 2019 restructured Lao taxation, setting profit tax at 20% with concessions for promoted activities. VAT was cut to 7% in 2022 as an inflation measure and restored to 10% in 2024. The frequency of these changes means any rate cited without a date is unreliable.
Governing law
- Income Tax Law, No. 67/NA of 2019 — Profit and personal income tax.
- Law on Value Added Tax, No. 48/NA of 2018 — As amended; rate changed in 2022 and 2024.
In practice
Profit tax is 20% generally, with reduced rates for promoted sectors and higher for tobacco. Personal income tax is progressive to 25%. VAT is 10% following the 2024 restoration from the temporary 7% rate. Withholding applies to dividends, interest and royalties, typically at 10%. The VAT rate moved twice in three years — always cite the rate with its effective date. Tax incentives under the Investment Promotion Law are granted by promotion zone and activity, not automatically.