Vertex CyberTax News

VAT System to be Implemented in Laos

Laos is set to replace the current Business Turnover Tax with a VAT system by 1 January 2009.  The National Assembly passed the VAT law back in 2006 and Ministry of Finance is working on the details of implementation.

A draft of the VAT Instruction is expected to be issued by June.  Under the VAT Law, those companies with annual turnover amounts over Kip400M (about US$45K) will be required to register for VAT purposes.

Additionally, the new system introduces a VAT withholding tax (WHT) for services performed by foreign companies which is rather uncommon and not usually found in other VAT systems. Currently, no provisions are in place yet for VAT refunds, and transitional issues during the design stage.

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