Lao Government Rolls Out New Tax Regulations on E-Commerce

Lao Government Rolls Out New Tax Regulations on E-Commerce
FILE: this image is used only for representational purpose (photo: Investor Place)

The Ministry of Finance announced a new regulation on mandatory tax payments for all digital shopping platforms in its latest notice, released on 14 February.

The notice classifies digital platform shopping websites into three groups: registered enterprises in the Value-Added Tax (VAT) system, micro-enterprises, and revenue-generating individuals, legal entities, and organizations.

Under the new regulations, enterprises registered with the VAT system must include their taxpayer identification number and VAT certificate in their advertisements for selling goods and services through e-commerce channels. They must also inform users whenever VAT is collected.

Microenterprises, however, are not required to inform users when collecting tax but must display their taxpayer identification number in their advertising. 

VAT-registered enterprises, microenterprises, as well as revenue-generating individuals, legal entities, and organizations must provide information on the purchase of digital products, services, and every electronic commerce activity. Only VAT-registered enterprises are required to connect their electronic information to the Tax Revenue Information Management System (TaxRIS).

The TaxRIS system is a government investment aimed at modernizing revenue collection. It aligns with the strategic plan to make tax payments easier for taxpayers, ensure all taxes are accounted for in the state budget, and enhance transparency. 

Furthermore, all three e-commerce groups must manually submit their revenue tax, VAT, profit tax, salary tax, and other taxes through the government’s website. Additionally, they must maintain accounting according to the system prescribed by the Law on Accounting Management and submit proper documentation to receive an annual tax payment certificate.

The notice also instructs the Tax Department nationwide to streamline procedures for the three groups. This includes facilitating the issuance of taxpayer identification numbers to individuals, legal entities, or organizations that conduct electronic commerce to access the TaxRIS system fully.

Failure to comply with the new regulations may result in warnings, fines, legal action, or even the platform’s shutdown.

The Ministry’s new regulations aim to enhance tax compliance among digital shopping platforms in Laos. These measures, including the integration of taxpayer identification numbers and VAT certificates in advertisements, reflect the government’s commitment to modernizing revenue collection and ensuring transparency in e-commerce transactions.