Laos: local rules

Laos has only a short transfer pricing rule, not a full regime. The Law on Income Tax (Amended) No. 88/NA of 25 June 2025 replaced the 2019 Income Tax Law No. 67/NA, and the Lao Official Gazette lists it as published on 19 June 2026. Law firms report it took effect on 1 July 2026, but one source says 1 September 2026. Art. 3(15) defines related parties as people or entities that take part directly or indirectly in managing, controlling or funding the same business, or that are partners in the same business or otherwise directly connected persons. Art. 13(5) says that if related parties trade on terms that unrelated parties would not use, for example to avoid tax, the tax authority may change the value and terms of the deal or deny it, under implementing rules. Art. 13(4) requires a permanent establishment of a foreign company to be taxed as if it were an independent enterprise dealing on the same or similar terms. Art. 18(14) also denies a deduction for costs above market price without a good reason.

No transfer pricing documentation duty was found. The law has no master file, local file, disclosure form or filing threshold. Law 88 art. 3(14) defines the 'transfer price', but no Ministry of Finance decision, notice or guideline on transfer pricing was found, and PwC (reviewed 7 August 2026) says no transfer pricing regulations are in effect and that guidelines are being drafted. Under art. 14(2) and art. 22(2), a taxpayer that keeps incorrect books, does not cooperate or does not give data can be taxed on a deemed profit (7% of revenue for farming and handicrafts, 10% for industry, 15% for trade and services, 30% for electricity and mining supply), with the tax payable within 15 days of the notice. Keep intercompany agreements and pricing support in case of a Tax Department audit.

The law names no pricing methods and gives no comparable or range rules. Art. 3(13) and (14) define market price and transfer price, and art. 13(5) lets the tax authority restate value and terms 'according to the regulations'. The law does not say which regulations. Lao tax advisers expect the OECD arm's length approach and OECD style methods to be used in practice, but this is commentary, not law. Audit focus reported by DFDL is loss making entities, management fees, intellectual property charges and loans.

Law 88 art. 71 says breaches can lead to education, warning, discipline, fines, civil compensation or criminal punishment under the law, and gives no amounts. Art. 13(3) makes a payer who fails to withhold or remit tax on payments to non-residents liable for the tax and a fine. The amounts sit in the Tax Administration Law (No. 66/NA of 2019) and its rules. PwC reports a late filing or payment penalty of 0.1% a day of the tax due, and under-reporting penalties of 30%, 60% and 100% of the tax for first, second and third offences, with the tax department able to audit back three accounting years. DFDL's May 2025 note on the draft said transfer pricing non-compliance could cost 50% of the under-reported tax, which was not found in the enacted text.

Laos has a domestic minimum profit tax in the amended Income Tax Law (in force from mid 2026), but no detailed rules were found. Art. 3(20) defines the minimum profit tax as a top-up so that a legal entity in a multinational group pays at least 15%. Art. 12(3) makes a Lao legal entity in a group with annual revenue meeting the OECD Inclusive Framework conditions liable for it. Art. 15 says that if the tax actually paid is below 15% under the international rules, the entity pays the difference in Laos, with the steps left to later regulations. No implementing regulation, revenue threshold, return form or due date was found, so the tool assumes the usual EUR 750m test and shows no date. Laos is not an OECD Inclusive Framework member, according to ECCIL.

The tax year is the calendar year. Art. 24 requires accounts to close on 31 December unless the Ministry of Finance permits another 12 month cycle. The profit tax declaration and the financial statements must be filed by 31 March of the next year (art. 20(1) and art. 21), 30 April for companies listed on the Lao Securities Exchange, or within 3 months of year end for a permitted other year end. Tax is paid in advance twice a year, by 20 July and 31 December (art. 22(1)), and the balance falls due with the assessment. Withholding tax on payments to non-residents without a Lao establishment is declared within 15 days of payment (art. 20(2), art. 22(3)). Laos has no country-by-country reporting rule that was found. The profit tax rate is 20%, 10% for listed companies, under the amended law as reported by PwC and VDB Loi.