Lao People’s Democratic Republic
Peace Independence Democracy Unity Prosperity
Ministry of Finance NO: 3281/MOF
Dated 06 October 2014
On Tax Revenue Collection Management
Minister of Finance issues an instruction on
Tax Revenue Collection Management
This Tax Revenue Collection Management is issued in order to determine principles, regulations, methods and procedures of Tax revenue collection management across the country to ensure the contribution to the state budget rightfully as defined by law.
The targets of this instruction are:
The principle of the tax revenue collection management will be in a uniformed standard across the country according to law and regulation on the tax certificate issuance, tax revenue collection plan, tax declaration form usage, tax revenue collection control, and coordination and report system.
Level of management determined in this instruction and the instruction on the implementation of the 3 build directive pilot project of finance sector.
Legal entities and Individuals, organizations who have just started their business shall apply for tax identification number from tax sector, the set of proposal must consist of
After receiving the tax identification number application, the Tax sector shall immediately check if the application and document attached are correct and fully complied with the requirement or not. If it is not complied, the tax sector shall notify the applicant immediately. If it is complied, the tax sector shall issue the tax identification number to the applicant within 3 to 5 working days from the date of application submission;
The principle and method of the tax identification number determination are mentioned in the decree on the tax identification number No. 354 PM, dated 05 October 2007 and the instruction on the implementation No. 0559, MoF, dated 13 March 2008.
The responsible tax officer shall be able to summarize the fundamental statistic of enterprise in a monthly, quarterly and yearly basis as following:
1. Group the enterprise base on sector to show type of tax paid, type of tax exception, the period of tax exception (for detailed implementation, please refer to the form determined by the Taxation department);
Every calendar year, the responsible tax officer shall summarize all fundamental statistic of enterprise which shows the amount of enterprise that submit the annual report of financial status, the amount of the fundamental enterprise which did not submit the annual report of financial status, the number of new enterprise, the number of enterprise that temporary or permanently stop running business, number of enterprise certified as bankruptcy, number of enterprise which have moved out, number of enterprise that have been removed from the following up list, number of enterprise under tax exception divided by type of tax and number of enterprise whose tax exception have already expired.
Legal entities and Individuals who are running business, having income either shown in the value-added tax system or not, Lao nationalities, immigrants, foreigners, shall submit the financial report to request for a certificate of tax payment every financial year, the financial report shall consist of the following documents:
After receiving the financial report, the Tax sector shall immediately check if the report is correct and fully complied with the requirement or not. In case of incompliance, the tax sector shall notify the tax payer immediately. If it is compliance, the tax sector shall check all tax payments of the tax payer base on the annual account balance by comparing the number real amount of tax payment with the certificate of the tax payment and shall issue the tax payment certificate within 3 to 5 working days from the date of submission; if the tax payment in the annual account balance is not fully complied, the responsible tax officer shall calculate and issue a letter of tax payment requirement to the business immediately. After all unpaid tax was paid; the certificate of tax payment shall be issued.
For business that registers their business in one province but pay tax to another province in where their income is generated, the provincial tax sector, the Vientiane capitals tax sector where the business is running shall issue the certificate of tax payment to the business in order to submit it to the tax office where the business is registered. The provincial tax sector, the Vientiane capitals tax sector shall be responsible for the issuance of the certificate of tax payment according to the law of Lao PDR.
For the tax payment in the district, tax shall be paid in fixed tax (lump sum) category as determined in article 56 of tax law, No. 05/NA, dated 20 December 2011, and assigned by the provincial tax sector, Vientiane Capital tax sector and determined by the 3 Build Directive.
1. The responsible officer shall summarize the tax payable liability of the business under his/her responsibility (the transferred liability, new liability) divided by taxes categories, businesses.
2. In order to control and decrease the number of tax liability, the responsible officer shall divide liabilities into different categories such as: the liabilities from tax declaration — late tax payment of each month, liabilities occurred from a fast checking, liabilities occurred from checking business's annual account, liabilities occurred from fine, and other type of tax liabilities;
3. After dividing the liabilities into different categories, the responsible tax officer, the director of the unit, the head of the cabinet office, the director of tax revenue management division, the director of taxation division of the province, capital, shall find solution, measures in order to ask for guidance from the higher management level about the liability clearance and others solutions. Every liability clearance shall have been certified and agreed by the authorized officer in a written basis.
4. At the financial closure (31/12/N), the responsible officer shall summarize all liabilities in the year and the detail of follow up list in different tax categories and type of business.
5. The summary of liability in the year (as determined in Number 04 mentioned above) shall be kept as a reference for the periodically follow up.
Legal entities and Individuals, organizations who have just started their business and individuals who have income shall require for tax identification number from tax sector to be in the monitoring system for tax revenue collection. The tax payer (Legal entities and Individuals, organizations who have income) are allowed to use only one set of tax identification number for a life time of their business operation this set of tax identification number cannot be changed or transferred to other entities.
The documents required for the tax identification number requirement are determined in part II, article 3 of this instruction.
If there is any change, cease, sale or transference of some part of the business or the entire business to other entities approved by related agencies, the business owner shall closed the business and inform the tax sector where their business was registered in a written form within 10 working days from the date of change, cease, sale or transference of the business and clear the unpaid tax. The responsible officer later will issue a certificate of tax payment at the same time with change, cease, and sale or transference of the certificate.
If the business is ceased permanently, besides paying all the unpaid tax, the business shall return the certificate of tax identification number to the tax sector where the business was registered in order to remove the business name out of the list.
For temporary cease, the business will be allowed to cease their business only after the business owner has notified the tax sector where the business is registered the reasons for ceasing in writing within 10 working days and clear the unpaid tax.
If there is a change in business's location, telephone number, the business owner shall notify the tax sector where the business is registered the reason of change in writing within 10 working days.
The tax payer shall submit the annual financial report to tax sector where the business is registered before 01 March of the next year as determined in article 38 of the tax law No. 05/NA, dated 20 December 2011; the annual financial report to be submitted to the tax sector shall be prepared according to part II, Article 5 of this instruction.
The taxpayer with or without income shall declare taxes monthly, quarterly, yearly as following:
Value added tax, excise tax, salary tax shall be declared every month before 15 of the next month:
Profit tax shall be declared quarterly base on last year's profit tax payment or real profit of that quarter or the estimated profit tax payment of the financial year. For the real profit tax of the year of payment shall be recalculated at the end of the year.
The profit tax payment shall be implemented in 4 periods as following:
The payment of each period is the advance payment. At the end of year deduction, if the advance profit tax payment is higher than the actual profit tax, the over-paid profit tax shall be transferred to the following year. But if the advance profit tax payment is lower than the actual profit tax occurred, the payment shall be made within 7 working days after the Memorandum of the monitoring signed.
3. The profit tax occurred from the shareholding profit shall be paid within 10 working days after the board of shareholder meeting or shareholders. In case, there is no profit tax declaration or board of shareholder meeting, the tax officer will calculate the profit tax of the shareholding profit according to the business outcome report of the year.
4. The profit tax occurred from rental shall be declared within 10 working days after the date of receiving the rental fee;
5. Other taxes such as tax for intellectual property income, income from receiving a prize, lottery or other subjects, income from buy-sell ownership of the land and other types of incomes, the income tax shall be deducted by the payer for tax payment and then declare tax payment within 10 working days after making payment to the individual.
6. Other taxes for the non residence but their income occurred in Lao PDR, the payer shall calculate all types of tax for that individual and declare tax payment within 30 working days after making payment to that non residence individual.
The business and its branches under the responsibility of the taxation department, the taxation division of the province, capital that is operating in other area or provinces and have income shall pay taxes as following:
The value added tax shall be paid to the tax office where the business is operated at 20% of the total value added tax occurred in that area or province, 80% shall be paid to the tax office where the business is registered as defined by the regulation on the value added tax declaration and payment No. 3227/MoF, dated 17 December 2009,
Excise tax (if applicable) shall be paid to the tax office of the area where the business is operated at 100%.
Income tax from salary shall be paid to the tax office of the area, province where the income occurred at 100%,
Profit tax shall be paid to the tax office where the business is located.
All certified business operator, importer — exporter, manufacturer and distributor and service provider without prejudicing the number of branches or the differentiation of professionals mentioned in the business license or concession license, this includes their overseas branches, shall use the same unified certificate of tax payment across the country and it shall be legally presented to other related agencies for business monitoring across the country.
The certificate of tax payment shall be taken as another essential factor allowing business to conduct some activities and it shall be attached along with other related documents when preceding any requirement to related government agencies such as:
It is prohibited for the government agencies to make a contract with any businesses without a certificate of tax payment of the previous year from the taxation sector.
The certificate of tax payment shall be expired within 0l year from 01 January of (Y) to 31 December of (Y).
Any tax officer who violates this regulation will be disciplined according to the decree on Government Personnel No: 82/PM, dated 19 May 2003 and other related laws and regulations.
Any taxpayer who fails to submit the annual financial statement as mentioned in part II, article 11 of this instruction, will be obligated as determined in the accounting law and tax law. The tax office will notify other related agencies to ban the activities of the business operator such as temporary or permanently withdrawing the business license, concession and notifying the issue to the public.
Any taxpayer who fails to submit the tax declaration and process tax payment as determined by law will be fined as mention in article 73 of the tax law, No. 05/NA, dated 20 December 2011 and article 52 of the law on value-added tax No. 04/NA, dated 26 December 2006.
Tax office in central, provincial, district and village level have to propagate, disseminate this instruction to the society, particularly individuals, legal entities and organizations; collaborate with other ministries and relevant local administration to manage, control, monitor and uniformly inspect the implementation of this instruction nationwide.
This instruction is effective after the date of signing. This instruction replaces the tax regulation No. 3225/MoF, dated 17 December 2009. Any regulations and provisions that contradict this instruction shall be cancelled.
Minister of Finance
Sign and Seal
Dr. Lien Thikeo
|Application for Tax Identification Number||Legal entities, Individuals and organizations which have established businesses shall apply for a tax identification number from tax division||Active|
|Business Owner to notify Tax division of reason for temporary cessation||In instances when a business is desirous of temporarily ceasing its operation, the business will be allowed to do so only after the business owner has notified the tax division in writing within 10 working days where the business is registered and clear the unpaid tax.||Active|
|Business Owner to return Certificate of Tax Identification Number in instances of permanent Business cessation||In instances when a Business permanently ceases to exist the business owner shall return the certificate of tax identification number to the tax division where the business was registered in order to remove the business name from the registration list.||Active|
|Content of Financial Report to be submitted for the Issuance of Tax Payment License/Certificate||The Financial Report, which shall be submitted by legal entities and Individuals when requesting the issuance of a tax payment license/certificate, shall comprise: |
(i) A summary of assets, liabilities of that financial year;
(ii) The report of business outcome of that financial year;
(iii) A summary of the list of fixed assets and the depreciation table;
(iv) A summary of all tax payments in the financial year and supported documents such as
certificate of tax payment
(v) The summary of the tax invoice utility;
(vi) Production plan, the annual revenue – expenditure target plan and the tax payment plan
of that financial year; and
(vii) Account balance before and after audit
|Issuance of Tax Payment License/Certificate||Legal entities and Individuals operating a businesses earning revenues, Lao nationals, immigrants and foreigners, shall submit a financial report every financial year to request the issuance of a tax payment license/certificate||Active|
|Notification of a Change in Location||In instances when there is a change in the location of the business or its telephone number, the business owner shall notify the tax division in writing within 10 days, where the business is registered of the reason for the change.||Active|
|Notifying the Tax division of a change, cessation, sale or transfer of a business by a Business Owner||A Business Owner who changes, ceases, sells or transfers his/her business or any part thereof to other entities approved by related agencies, shall inform the tax authority where the business was registered in writing within 10 working days from the date of changing, ceasing, selling or transferring the business.||Active|
|Payment of Excise Tax by Businesses in more than one location||Businesses and their branches under the responsibility of the taxation department or the ￼taxation division of the province, operating in other areas or provinces shall pay excise tax (if applicable) to the tax office in the area where the business is operated||Active|
|Payment of Income Tax by individuals working in Businesses in more than one location||￼Individuals working in Businesses and branches under the responsibility of the taxation department or the ￼taxation division of the province, operating in other areas or provinces shall pay Income tax to the tax office of the area, province where the|
￼income was accrued
|Payment of Other Taxes||A Tax Payer shall deduct taxes on intellectual property income, prize monies, lottery and other earnings, income from ownership transfer of land and other types of incomes and declare this tax payment within 10 working days after making payment to the individual.||Active|
|Payment of Outstanding Taxes upon a change, cessation, sale or transfer of a business by a Business Owner||A Business Owner who changes, ceases, sells or transfers his/her business or any part thereof to other entities approved by related agencies, shall clear the unpaid taxes upon notifying the Tax division of the change, cessation, sale or transfer of the business. The Business Owner shall be issued a certificate of tax payment at the same time with the certificate of change, cessation, sale or transfer of the Business.||Active|
|Payment of Profit Tax by Businesses in more that one location||Businesses and their branches under the responsibility of the taxation department or the ￼taxation division of the province, operating in other areas or provinces shall pay Profit tax to the tax office where the business is located||Active|
|Payment of Profit Tax from Rent||A Tax Payer shall pay ￼profit tax accrued from rent within 10 working days after the|
date of receiving the rental fee
|Payment of Profit Tax resulting from shareholding profit||A Tax Payer shall pay profit tax resulting from shareholding profit within 10 working days|
after a meeting of the board of shareholder or a shareholders' meeting.
|Payment of Taxes of Tax Payers not residing in the Lao PDR||Tax Payers not residing in the Lao PDR but earning income in the Lao PDR shall calculate and declare all taxes owed within 30 working days .||Active|
|Payment of Value Added Tax by Businesses in more than one location||Businesses and their branches under the responsibility of the taxation department or the ￼taxation division of the province, operating in other areas or provinces shall pay value added tax to the tax office where the business operates at 20% of the total value added tax incurred in that area or province, while 80% shall be paid to the tax office where the business is registered as defined by the regulation on the value added tax declaration and payment No. 3227/MoF, dated 17 December 2009;||Active|
|Payment Periods for Profit Tax||A tax payer shall pay profit tax in advance in 4 periods:|
1. First period shall be no later than 10 April of the year;
2. Second period shall be no later than 10 July of the year;
3. Third period shall be no later than 10 October of the year; and the
4. Fourth period shall be no later than 10 March of the following year.
|Periodic Declaration of taxes by Tax Payers||A tax payer, whether income earning or otherwise, shall declare taxes monthly, quarterly or yearly.||Active|
|Preparation of annual financial report in accordance with Article 5 of the Ministerial Instruction On Tax Revenue Collection Management No: 3281/MoF||The annual financial report to be submitted by a tax payer to the tax division shall be|
prepared in accordance with Part II, Article 5 of the Ministerial Instruction
On Tax Revenue Collection Management No: 3281/MoF
|Prohibition on Bribery and Collusion||Tax Payers are prohibited from offering bribes and colluding with tax officers with responsibility for revenue collection of the Government||Active|