12 March, 2020
Introduction
In June 2019, National Assembly (“NA”), the legislative branch of the State, passed a motion approving the adoption of the Law on Income Tax No. 67/NA dated 18 June 2019 (“Law on Income Tax”). This enactment of a separate instrument applicable specifically to income tax notably deviates from the previous approach of tax legislation in Lao PDR. Previously, income taxes, both personal and corporate, are subjected to general taxation law. More importantly, in fact, the Law on Income Tax demonstrates laudable attempts by the regulators to introduce a more progressive and investor-friendly income tax system in Lao PDR. This article will explore and discuss details of the important changes to income tax system under the new law and their potential impacts.
General Information
It is important to note that despite the draft having been approved by the NA in June 2019, in July 2019, the Ministry of Finance (“MOF”) had organised an official consultation session with representatives from the NA, MOF, Ministry of Public Works and Transport, governmental departments and other relevant sectors. The meeting considered proposed revisions submitted by the members of NA in relation to new tax legislations, including the Law on Income Tax, and revised draft laws as necessary to be reported to the meeting of the National Assembly Standing Committee for final approval before proceeding with promulgation process. Following the conclusion of the aforementioned finalisation process, on 3 February 2020, the Law on Income Tax was formally published in the Lao Official Gazette. On 11 February 2020, the MOF issued a notification for all new tax laws approved in 2019, including the Law on Income Tax, to be effective from 1 January 2020. It also permits any taxpayers who made their regulatory filing for January 2020 according to the previous law to recompile and revise their tax liabilities.
The full article can be found from Zicolaw's site here.
For more information, please contact:
Tuchakorn Kitcharoen, ZICO Law
tuchakorn.kitcharoen@zicolaw.com
