ARTICLE
29 March 2024

Laos Reinstates 10% VAT Rate

TG
Tilleke & Gibbins
Contributor
Tilleke & Gibbins is a leading Southeast Asian regional law firm with over 190 lawyers and consultants practicing in Cambodia, Indonesia, Laos, Myanmar, Thailand, and Vietnam. We provide full-service legal solutions to the top investors and high-growth companies that drive economic expansion in Asia.
Laos has returned its value-added tax rate to 10% from the 7% rate that had been observed for the last two years. The new rate was specified in Ordinance No. 003/PDT, dated March 19, 2024...
Lao Peoples Democratic Republic Tax
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Laos has returned its value-added tax rate to 10% from the 7% rate that had been observed for the last two years. The new rate was specified in Ordinance No. 003/PDT, dated March 19, 2024, and announced on the website of the Ministry of Trade and Commerce.

Prior to this, the last announcement of an adjustment in the VAT rate came in the last week of December 2021, when the Ministry of Justice published the Law Amending Certain Provisions of the Laws on Tax No. 01/NA, dated August 7, 2021, in the Government Gazette. This law, which entered into force in January 2022, amended the VAT rate from 10% to 7%.

Under Lao law, the ordinance is effective from its date of signing by the president of Laos (i.e., March 19, 2024). However, the tax authorities have indicated that the new rate will not be enforced immediately but will be implemented in the near future, such as when it is published in the Lao Official Gazette.

This change of the VAT rate to 10% does not come as a surprise. Some international experts and organizations had been recommending that Laos adopt a 10% VAT rate given its current economic challenges, arguing that Laos should prioritize collecting tax and replenishing the state budget. This was, for instance, recommended by the World Bank in the November 2023 Lao PDR Economic Monitor.

Tilleke & Gibbins will continue to monitor the situation to determine when the 10% VAT rate will be enforced. For more details on the rate changes, or on any aspect of tax law in Laos, please contact Tilleke & Gibbins at laos@tilleke.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
29 March 2024

Laos Reinstates 10% VAT Rate

Lao Peoples Democratic Republic Tax
Contributor
Tilleke & Gibbins is a leading Southeast Asian regional law firm with over 190 lawyers and consultants practicing in Cambodia, Indonesia, Laos, Myanmar, Thailand, and Vietnam. We provide full-service legal solutions to the top investors and high-growth companies that drive economic expansion in Asia.
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