Annual Audit of Personal Income Tax in the Lao PDR

Are you ready for your annual personal income tax audit, due by 31 March 2021?

Did you know you need to register for a taxpayer identification number?

Do you know if you’re eligible for a family support allowance deduction?

On the same day Instruction No. 0819/MoF Implementing the Income Tax Law dated 10 February 2021 was issued, the Minister of Finance issued Notice No. 0831/MoF (the “Notice”) to inform locals and expatriates earning income in the Lao PDR to register for a taxpayer identification number.

In order to collect information on, manage, and monitor individuals earning income in the Lao PDR and to ensure the accuracy, transparency, and fairness of the payment of income taxes applicable to individuals’ and employees’ income, the Notice requests that employers, employees, laborers, businesspersons, consultants, experts, online traders, etc. register for their taxpayer identification number by 30 June 2021 with the tax authorities located where they reside or work. The information and documents required for registration are as follows:

• Valid identification card/passport
• Family book
• Registered telephone number
• Details of work, location, and address
• Bank account
• Lao social security registration number

We understand that the registration application has just opened for governmental officials, but not yet for the private sector.

This and the new requirement for an annual audit of personal income tax raises some interesting questions:

• Will the registration and taxpayer identification number be ready for the annual personal income tax audit by 31 March 2021?
• If not, will the audit be postponed?
• If the audit is not postponed, how will it be conducted?
• Will expatriate employees be subject to the annual audit?
• If yes, will they be eligible for the family support allowance?
• Will employers have the obligation to support the above annual audit?
• What documents are required to claim the family support allowance?

For answers to these and other questions related to the new personal income tax requirements, contact the undersigned or your usual VDB Loi adviser.