to navigate Lao E-commerce. The Ministry of Finance of Laos published regulation number 0558/MOF in February 2024. This provides the most recent guidance on tax obligations of e-commerce providers and digital platforms.
According to the new guidance, digital platforms, ecommerce suppliers, and non-resident digital service providers are required to register for and pay VAT via the DTax System. New rules apply to all transactions starting from August 1, 2024 This also applies to those foreign companies that aren’t registered or residents in Laos, but who earn money from there.
You can pay for e-invoices in USD, EUR and CNY.
Taxes on digital services
The VAT rate for digital service providers is 10 percent. The following are included:
- Online advertising and games;
- Apps for mobile devices
- Download software programs
- Music, pictures, videos and games on digital media;
- Websites, electronic database management, web hosting and other services are available.
The digital platform will be responsible for the VAT collection on digital products and services if they are delivered through it. The new regime also covers both services provided to B2B and B2C customers in Laos.
Categorizing digital platform operations
If you engage in any of these activities, then a taxpayer is considered an operator of an electronic digital platform.
- Directly or indirectly dictating the terms and condition of digital products and services
- Directly or indirectly, those who process payments for digital services.
- Directly or indirectly engaged in digital service delivery activities;
- They provide customer support for digital service users.
Tax filing
Three times a year, VAT must be filed online via the LTD portal.
1St Reporting period is January-April and must be submitted by May 31.
2The nd Reporting period is between May and August, and must be submitted by September 30.
3Rd Filing – Reporting period from September to December, and must be submitted by the 31st of January following.
The Laos Tax Department accepts payments in USD, EUR and CNY or any other currency approved by them.
Non-compliance penalties
Laos’ tax department may impose the following penalties and fines:
- The late filing of VAT per quarter will result in a penalty of US$800.
- The outstanding VAT payment is subject to a daily interest rate of 0.1%.
- The Laos Tax Department will charge 30 percent VAT for the first payment demand, 60 percent VAT for the second payment demand, and 100 percent VAT for the third payment demand.
For non-compliance, the Laos Tax Authorities can propose suspension or termination of digital service providers.
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