Law on Income Tax No. 88/NA dated 25 June 2025 (“Amended Income Tax Law“) was officially published in the Lao Official Gazette on 19 June 2026 and came into force on 1 July 2026. The Amended Income Tax Law replaced the Law on Income Tax No. 67/NA dated 18 June 2019, and section III of the Law on the Amendment of Certain Articles of the Laws Related to Taxation No. 01/NA dated 7 August 2021.
The Amended Income Tax Law sets out the principles, regulations, methods and measures for tax administration, oversight, and compliance. It aims to streamline revenue collection into the state budget, promote domestic business and production growth, and align Lao PDR’s taxation system with regional and international integration standards to support national socio-economic development.
Key Changes
- Expansion of profit tax scope: The Amended Income Tax Law states that for local legal entities within a multinational group of companies, if the actual tax rate paid by such entity is less than 15% under the relevant international regulation, such entity must pay the full amount of any additional domestic minimum profit tax.
- Specific sector profit tax adjustments: The New Income Tax Law raises the rate for producers, importers and sellers of alcoholic beverages from 20% to 22%, with 2% going to a public health fund. It also introduces a 30% rate for casinos operators.
- Tax-Free Threshold: Individuals with monthly income of up to LAK 2.5 million are exempt from personal income tax.
- Enhanced administrative enforcement powers: The Amended Income Tax Law stipulates that the Department of Tax has the right and duty to issue an order to freeze funds in deposit bank accounts in commercial banks of individuals or companies that violate income tax laws and regulations.
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