In February 2024, the Lao Ministry of Finance issued Regulation No. 0558/MOF, which provides updated guidance on tax obligations for e-commerce and digital platform providers.
Based on the latest guidance, non-resident suppliers of digital goods and services, e-commerce providers and digital platform providers must register and pay VAT through the DTax system. The new rules apply to transactions from: August 1, 2024 It also applies to foreign e-commerce providers who are not residents or registered companies in Laos but derive their income from Laos.
Electronic invoices can be paid in USD, EUR, and RMB currencies.
Taxation on the provision of digital services
Digital service providers are subject to a 10 percent VAT rate. This includes the following transactions:
- Online gaming and online advertising services.
- Mobile application.
- software program.
- Digital music, photos, videos and games.and
- Electronic database management such as websites and web hosting.
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Where digital goods and services are provided through a digital platform, the digital platform is responsible for collecting VAT on these goods and services. Additionally, the new regime covers services for both his B2B sales and B2C sales within Laos.
Classification of digital platform business
A taxpayer qualifies as an electronic digital platform operator if it engages in any of the following activities:
- Directly or indirectly governing the terms and conditions of digital products and services.
- Any person directly or indirectly involved in the payment processing activities of the Digital Services.
- Persons directly or indirectly involved in activities related to the provision of digital services.and
- A company that provides support services to digital services customers.
VAT declaration
VAT returns must be submitted via the online LTD portal and are done three times a year.
1cent Submission – Reporting period runs from January to April and is due by May 31st.
2n.d. Submissions – Reporting period runs from May to August, with submissions due by September 30th.and
3rd Submission – The reporting period runs from September to December and is due by January 31st of the following year.
As mentioned above, VAT payments can be made in USD, EUR, CNY or any other currency approved by the Lao Tax Department.
Penalties for violations
The Lao Tax Department may apply the following fines and fines:
- Penalty of USD 800 per quarter for late VAT declaration.
- Interest payment of 0.1% per day on unpaid VAT payments.
- The Lao Tax Department will pay 30% of the VAT for the first payment request, 60% of the VAT for the second payment request, and 100% of the VAT for the third payment request.
The Lao Tax Authority can also propose suspension or termination of a digital service provider for violations.
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