18 April 2017
LAOS: New Tax Incentives Unveiled for Designated Projects in Undeveloped Regions
Extended tax incentives are now on offer for FDI projects operating in the less-developed regions of the country. In particular, projects in the agriculture and healthcare sectors will qualify for profit tax exemptions for five years in areas with under-developed infrastructure and for three years in places where the infrastructure is more developed. These measures come on top of existing tax incentives, taking the overall exemptions to 15 and seven years respectively.
A raft of other FDI-related incentives have also been introduced, including exemptions from land lease fees, import duty and VAT waivers on all vehicles and equipment that cannot be sourced in Laos, as well as on any raw materials and spare parts for the production of export goods. Similarly, finished export products will also enjoy zero export tax and VAT exemption, while locally-sourced raw materials used to produce exports will be VAT-exempt.
The qualifying sectors, as designated by the Laos government, include organic agriculture; seed production; livestock breeding; environmentally-friendly agricultural processing; handicrafts; education, human resource development; labour training; production of educational tools and equipment; hospitals with modern facilities; pharmaceutical production; production of medical equipment; and herbal medicine.