Instruction Implementing VAT LAW

On 11 January 2017, the Ministry of Finance issued Instruction No. 0077/MOF (“the Instruction”) to implement and further clarify the provisions under the Amended VAT Law No. 52/NA dated 23 July 2014.

Below are the main points covered in the Instruction:

• VAT registration requirements for foreign contractors in Laos for 90 days and more
• The applicability of VAT or VAT withholding on the overseas supply of goods plus services
• The determination of business activities that are operated by state enterprises
• Confirmation that the importation of goods from special and specific economic zones is VATable in the same way as an importation from overseas
• Clear instruction that the sale of assets by banks and financial institutions is VATable
• Confirmation that self-construction activities are VATable
• Clarification of place of supply rules
• Further clarification on items that are subject to or exempt from VAT for businesses conducting VAT-exempt activities
• Further extension of VAT-exempt revenue for banks and financial institutions
• Further classification of deductible and non-deductible input VAT
• Clarification on the VAT deduction and refund method

If you would like further information on how this will affect your business, please contact the undersigned, or your regular VDB Loi adviser.

VDB Loi is a network of leading law and advisory member firms and affiliated companies that comprises 10 partners and over 100 lawyers and advisers, with offices in Cambodia, Indonesia, Laos, Myanmar and Vietnam, and representatives in Japan and Singapore. We provide the highest quality solutions for transactions and taxation.

You can find more information on our Laos office here.