On 23 April 2024, the Minister of the Ministry of Finance issued Notification on the Implementation the Value Added Tax According to the Ordinance of the President No.003/PS, dated 19 March 2024 on the Revised Value Added Tax Rate No.1360/MOF ("Notification").
The Notification provides that, commencing on 1 May 2024, the value added tax ("VAT") rate on the following shall be 10%:
- importation of goods from foreign countries and special economic zones;
- supply of goods and services within the country by individuals, legal entities and organisations which are in the VAT system; and
- receipt of supply of goods and services by legal entities that are not established in Lao PDR.
Regarding the calculation of the VAT, the Notification states that:
- From May 2024 onward, supplying of goods and services within the country must issue invoices for VAT and apply the rate of 10% in calculating the VAT.
- The supply of goods and services covered by contracts concluded prior to 1 May 2024 such as those relating to construction projects, insurance, etc. and for which no invoices were issued shall be charged the old VAT rate of 7%. However, if invoices are issued in May 2024 onwards, the VAT is calculated at 10% even if the supply of goods and services have not been completed on the date of the issuance of the invoices or advance payment has not been made.
