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April 21, 2020

Laos Clarifies COVID-19 Tax Exemptions

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On April 10, 2020, Laos’ Ministry of Finance published Notification No. 1027/MOF to provide further details on income tax relief outlined in a previous notification, issued on April 2, to mitigate the economic impact of the COVID-19 pandemic.

The new notification provides clarification on the tax exemption that was provided for salaries and other income below LAK 5 million (approximately USD 560) per month.

  1. The new notification confirms that income of employees in the private or public sector below LAK 5 million per month will not be subject to personal income tax for a three month period (April, May, and June). For salaries higher than LAK 5 million, the usual progressive rate will be applied starting from LAK 5 million. The deadline for payment of this tax is the 20th of the following month.
  2. A three month profit tax exemption (April, May, and June) for micro-enterprises, as defined in the Income Tax Law, is confirmed. Micro enterprises that have paid their income tax in advance, under an agreement with the authorities, can deduct the amount paid for April, May, and June from payments for the following months, until the excess amount is exhausted.
  3. Those declaring personal income tax by means of a lump sum, or according to a concession agreement entered into with the government, must still declare as usual. The notification explains that these categories are not entitled to the exemption detailed above.
  4. Declaration of the LAK 5 million personal income tax which is exempted must be done in the usual method for personal income declaration. The TaxRIS system will automatically exempt the first LAK 5 million of income accordingly.
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