Laos Introduces Exemptions from Penalties for Late Filing and Payments of Taxes

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  • On April 22, 2020, Laos’ Ministry of Finance issued Notification 1061/MOF, which provides exemptions from penalties for businesses for the late payment and filing of taxes.
  • Under normal circumstances, the late payment and filing of taxes can result in a penalty of 0.1 percent of the tax due each day of delayed payment and a 500,000 kip (US$55) fine.
  • Businesses that have not filed or paid taxes from January 2020, must do so by the end of May, whereas unpaid or late filing of taxes from April-June, must be done by end of June 2020.

The Ministry of Finance of Laos issued Notification 1061/MOF (No. 1061/MOF) on April 22, 2020, which exempts taxpayers from penalties for the late filing and payments of taxes.

This is part of the ongoing measures from the government to mitigate the economic impact of COVID-19. The country issued tax relief measures on April 10, which exempted micro-enterprises from paying income tax for three months from April-June 2020.

Additionally, employees in the public or private sector earning 5 million kip (US$559) or below are exempted from paying personal income tax (PIT) for the same time period. Those earning above this figure will have the first 5 million kip (US$559) exempted and will be taxed at the progressive rates of 10-15 percent.

Investors should seek the help of registered tax advisors to see how these changes can benefit their operations.

What does the regulation say?

Under No. 1061/MOF, businesses that have not filed and paid taxes for the period of April, May, and June 2020, will be exempted from the usual penalty of 0.1 percent of the tax due for each day of delayed payment and a 500,000 kip (US$55) fine. Businesses that have already paid these penalties before No. 1061/MOF was issued will not be eligible for exemption.

The penalties are outlined in Article 73 of the Income Tax Law, Article 60 of the VAT Law, and Article 38 of the Excise Tax Law.

Any companies that have not filed and paid their taxes from January 2020, will also be exempted from the aforementioned penalties but this is deferred until May 29, 2020. Companies are reminded to provide the tax filings for each month of the period in question for the purpose of a tax audit.

The tax payments and filings for April and May 2020 must be done by June and the filings and payments for the month of June are to be done in accordance with prevailing laws and regulations, by July 20.

The Ministry of Finance will amend its TaxRIS online portal to support its new measures.


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