This overview provides clear, practical information on the corporate tax regime in the Lao People’s Democratic Republic (Laos) as of 2025. Below you’ll find the precise corporate tax rates, special regimes, and conditions for reduced or increased taxation impacting companies operating in Laos.
Corporate Tax Rate in Laos (2025)
Laos applies a flat corporate income tax rate of 20% on taxable profits generated by companies. Assessment is conducted on a standard corporate basis, with most entities in the country subject to this regime.
| Corporate Tax Rate (%) | Currency (LAK) | Assessment Basis |
|---|---|---|
| 20% | ₭ (LAK) | Corporate Profits |
There are no progressive brackets; a flat 20% applies unless special conditions (detailed below) are triggered.
Industry-Specific Surtaxes & Reductions
Certain industries and activities in Laos incur additional corporate tax, while others benefit from significant reductions designed to promote specific economic or social policies. The table below summarizes these adjustments to the standard rate:
| Condition / Industry | Adjustment (%) | Final Rate (%) | Notes |
|---|---|---|---|
| General corporate tax (all companies) | – | 20% | Standard flat rate |
| Tobacco producers, importers, distributors | +2% | 22% | Surtax funds Tobacco Control Fund |
| Mineral industry (with concession agreement) | +15% | 35% | Applies only with legal concession |
| Listed on Lao Securities Exchange (LSX) (First 4 years from registration) |
-7% | 13% | Temporary reduction (incentive) |
| Training and research centres | -13% | 7% | Permanent reduction |
| Companies using green technology | -15% | 5% | Permanent reduction (environmental incentive) |
Note: All rates are expressed as a percentage of taxable corporate profits. LAK = Lao Kip. For reference, as of January 2025, the exchange rate is approximately 1 USD = 20,500 LAK.
Explanatory Notes on Tax Adjustments
- Tobacco Surtax: An additional 2% is levied on companies in tobacco production, import, or distribution, with funds specifically earmarked for public health initiatives via the Tobacco Control Fund.
- Mineral Industry Surtax: Mining companies with concession agreements incur a higher overall rate (35%). This surcharge finances resource management and related state projects.
- LSX Listing Reduction: Newly listed entities on the Lao Securities Exchange benefit from a reduced tax rate (13%) for their first four years, supporting public offerings and capital market development.
- Education, Research, and Technology: Entities operating as training/research centers (7%) or using certified green technologies (5%) qualify for considerable reductions, promoting long-term human capital and environmental investment.
Other Relevant Corporate Tax Features
Laos operates a flat-rate system for corporate income tax, meaning all qualifying profits are taxed at the rate applicable to your industry or company’s status. There are no disclosed progressive brackets or special holding period rules for standard corporate taxation.
No official guidance has been made public regarding minimum or maximum holding periods for any special tax treatments as of 2025.
Quick Reference Table: Laos Corporate Tax Summary (2025)
| Parameter | Value |
|---|---|
| Corporate tax type | Flat |
| Standard tax rate (%) | 20% |
| Currency | ₭ (LAK) |
| Progressive brackets | None |
| Key industry surcharges/reductions | Applied as per sector (see above) |
| Holding period requirements | Not specified |
Pro Tips: Navigating Laos Corporate Tax in 2025
- Carefully verify if your industry or business activity qualifies for the reduced or increased rates—especially for incentives tied to the LSX, research, or green technology.
- If operating in the mineral or natural resources sector, review your concession agreement to confirm applicable surcharges; the total can be significantly higher than the standard rate.
- Companies considering a listing on the Lao Securities Exchange should factor the tax reduction into financial projections for the initial four years post-listing.
- Monitor government updates through official sources, such as the Ministry of Finance of Laos, for any upcoming changes or clarifications on industry-specific incentives.
In summary, the Lao corporate tax system centers around a flat 20% headline rate, but notable surcharges and reductions can materially affect your effective tax burden. The state’s targeted incentives encourage green technology, capital market participation, and investment in education and research. Be sure to review sector-specific regulations closely, as effective rates can differ substantially from the statutory baseline depending on your company’s activities or structure.