Laos VAT Guide 2026

Overview — VAT in Laos

Value-added tax (VAT) in Laos was introduced under the Tax Law and is administered by the Tax Department of Lao PDR. VAT applies to the supply of goods and services by taxable persons in Laos and to imports of goods. The standard VAT rate is 10%, which was restored from a temporary reduction to 7% in May 2024. Businesses with annual revenue exceeding LAK 400 million must register for VAT. VAT returns are filed monthly, with payment due by the 20th of the following month. Laos operates a credit-invoice VAT system where input VAT can be deducted from output VAT.

Standard Rate — 10%

The standard VAT rate of 10% applies to most supplies of goods and services in Laos. VAT is calculated as 10% of the taxable value of the supply. The rate was temporarily reduced to 7% during the COVID-19 recovery period and was restored to 10% in May 2024. Businesses registered for VAT must charge VAT on their sales (output VAT) and can claim credit for VAT paid on their purchases (input VAT). The net VAT payable is output VAT minus input VAT. If input VAT exceeds output VAT in a given month, the excess can be carried forward to offset future VAT liabilities.

Zero-Rated Supplies — 0%

The following supplies are zero-rated (0% VAT) in Laos: exports of goods and services, international transportation services, and supplies to certain investment projects. Zero-rated supplies allow businesses to claim input VAT credits while charging no VAT on their output. Exporters can claim refunds of input VAT incurred in producing exported goods. Businesses must maintain proper documentation to evidence export transactions, including customs declarations and shipping documents.

Exempt Supplies

Certain goods and services are exempt from VAT in Laos, meaning no VAT is charged and input VAT on related purchases cannot be claimed. Exempt supplies include basic food staples, agricultural inputs, healthcare services, education services, insurance services, financial services, and rental of residential property. Businesses making only exempt supplies do not need to register for VAT. The list of exempt supplies is defined under the Tax Law of Lao PDR.

VAT Registration

Businesses with annual taxable revenue exceeding LAK 400 million must register for VAT with the Tax Department of Lao PDR. Registration is done through the Tax Department's filing system. Non-resident businesses providing services to Laotian customers may also be required to register for VAT. Failure to register when required can result in penalties including back-assessment of VAT plus interest. Voluntary registration is permitted for businesses below the threshold.

VAT Filing and Payment

VAT returns must be filed monthly by the 20th of the month following the taxable period. Filing is done through the Tax Department's online system or at local tax offices. The return must include total output VAT, input VAT claimed, and net VAT payable or refundable. Late filing attracts penalties under the Tax Law. VAT refund claims for exporters must be filed separately and are subject to Tax Department review. Businesses must retain VAT records and invoices for the prescribed retention period.

FAQs

Can I claim VAT refunds as an exporter?

Yes, exporters can claim refunds of input VAT incurred in producing exported goods. Refund claims are subject to Tax Department audit and verification.

What is the penalty for late VAT filing?

Late filing and late payment attract penalties as prescribed under the Tax Law of Lao PDR. Penalties include fines and interest on unpaid amounts.

Is VAT applicable to digital services?

Yes, non-resident digital service providers supplying services to Laotian customers may be required to register for VAT and charge 10% VAT, depending on the evolving regulatory framework.

What records must be kept for VAT purposes?

Registered businesses must maintain sales ledgers, purchase ledgers, VAT invoices, import/export documents, and bank statements for the period prescribed by the Tax Department. All records must be available for audit upon request.

Disclaimer

This guide provides general information about Laotian VAT 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.