Tax Identification Numbers in Laos: Compliance by June 2021
- The government of Laos issued Notification 0831 in February 2021, which obligates all individuals liable to personal income to obtain a tax identification number (TIN).
- Eligible individuals have until June 30, 2021, to obtain a TIN. They must register at their local tax district offices.
- The regulation is part of Laos’s ongoing tax reform. The country issued a new Income Tax Law in 2020, which sets out the latest tax rates for businesses and employees.
Laos’s Ministry of Finance issued Notification 0831 (No. 0831) on February 10, 2021, which states that all individuals liable to personal income tax, including citizens and foreigners, must register for a tax identification number (TIN) at their local tax office by June 30, 2021.
What does the new tax law say?
Under the new regulation, individuals liable to personal income tax include the following groups:
- Public servants;
- Army personnel;
- Athletes; and
- Retailers, among many others.
The aim of the regulation is to protect and monitor income earners who have fulfilled their tax obligations. Furthermore, the TIN registrations will help the government create a national personal income database to better collect and analyze state taxes.
Compliance and submission of documents
To register for a TIN, applicants will need to submit the following documents to their district tax offices:
- Social security number;
- Valid ID card or passport;
- Family registration book;
- All bank account numbers; and
Continuing income tax reforms
The new regulation is part of the government’s ongoing tax reforms. In February 2020, the new Income Tax Law (Tax Law No. 67/NA) was issued and sets out the latest tax rates for employees and businesses.
The new law provides better progressive rates and a larger deduction base for personal income tax (PIT). The government hopes the latest tax law will improve compliance and productivity in Laos.
Investors are advised to use the service of registered tax professionals to better understand these latest tax amendments.
Profit tax in Laos
Profit tax is levied on profits for all domestic and foreign businesses and is imposed on profits. The rates range from 0-20 percent.
Personal income tax in Laos
The latest progressive tax rates for Laos is:
Income tax for selected business activities in Laos
The government has also levied specific income tax rates for selected business activities.
Penalties for non-compliance
There is a fine of between LAK1.5 million (US$160) and LAK3 million (US$321) for non-compliance. These are highlighted in the following table.
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