Laos Investment Income Tax Guide 2026

Overview — Investment Income Taxation

Laos's tax system taxes investment income through withholding tax mechanisms. Dividends, interest, and royalties are subject to WHT at source. For residents, the standard WHT rate is 10% on dividends, interest, and royalties. For non-residents, the standard WHT rate is 20%, subject to reduction under applicable Double Tax Treaties (DTTs). Capital gains from investment assets are included in ordinary income and subject to progressive PIT rates (0–25%) for individuals or CIT at 20% for companies. The Tax Department of Lao PDR administers investment income taxation.

Dividend Taxation

Dividends paid by Laotian companies to shareholders are subject to withholding tax:

• Resident individuals: 10% WHT (final tax)
• Resident companies: 10% WHT (may be creditable against CIT)
• Non-residents: 20% WHT (subject to DTT reduction)

The 10% WHT on dividends for residents is a final withholding tax for individuals, meaning no further tax is due. For corporate shareholders, the WHT may be credited against the company's CIT liability. Under DTTs, the WHT rate on dividends paid to non-residents may be reduced to 5–10% depending on the shareholding level and treaty provisions.

Interest Taxation

Interest income in Laos is subject to the following withholding tax treatment:

• Resident individuals: 10% WHT on interest income (final tax)
• Resident companies: 10% WHT on interest (creditable against CIT)
• Non-residents: 20% WHT on interest (subject to DTT relief)

Interest on bank deposits, bonds, loans, and other debt instruments is generally subject to WHT. The standard rate for residents is 10%. Under DTTs, the interest WHT rate for non-residents may be reduced to 10% or lower depending on the treaty.

Royalty Taxation

Royalty income is subject to withholding tax at the same rates as dividends and interest:

• Residents: 10% WHT on royalty income
• Non-residents: 20% WHT on royalty income (subject to DTT reduction)

Royalties include payments for the use of patents, trademarks, copyrights, technical know-how, and similar intellectual property. The WHT is a final tax for individuals. For companies, the WHT may be creditable against CIT.

Capital Gains on Investments

Capital gains from the sale of investments are treated as ordinary income:

• Individuals: Included in taxable income subject to progressive PIT rates (0–25%)
• Companies: Included in taxable profits subject to CIT at 20%
• Immovable property: Subject to 2% income tax on transfer (separate treatment)

There is no separate capital gains tax regime in Laos. Gains are simply added to the taxpayer's ordinary income.

FAQs

Are dividends from Laotian companies subject to withholding tax?

Yes, dividends are subject to 10% WHT for residents and 20% WHT for non-residents. DTTs may reduce the non-resident rate.

Is interest on bank deposits taxed in Laos?

Yes, interest on bank deposits is subject to 10% WHT for resident individuals. This is a final withholding tax.

How is investment income from foreign investments taxed?

Laos follows a territorial tax system, so foreign investment income of residents is generally not subject to Laotian tax.

Can I claim a credit for WHT on dividends against my CIT?

Yes, corporate taxpayers can generally credit WHT on dividends and interest against their CIT liability, subject to the Tax Law provisions.

Disclaimer

This guide provides general information about Laotian investment income taxation for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Laotian tax advisor or the Tax Department of Lao PDR for advice specific to your situation. InvestmentKit does not provide tax advice.