VDB LoiUpdates & Analysis


Articles
1
Feb
2017
Instruction Implementing VAT LAW
On 11 January 2017, the Ministry of Finance issued Instruction No. 0077/MOF (“the Instruction”) to implement and further clarify the provisions under the Amended VAT Law No. 52/NA dated 23 July 2014. Below are the main points covered in the Instruction: VAT registration requirements for foreign contractors in Laos for 90 days and more The […]
9
Jan
2017
VDB Loi Laos Alert – Your 2016 Annual Profit Tax return: Are you ready?
Profit tax policy has changed in 2016 for many reasons, one of the main factors contributing to the change in orientation being the lack of tax resources. Thus, with the 2016 profit tax return filing deadline looming, it’s a good time for Lao companies to thoroughly review their tax risk areas and the effects of […]
25
Aug
2016
VDB Loi Laos Alert – Watch out for VAT applicability on banking activities
  The applicability of value added tax (“VAT”) on banking activities has shifted from a broad exemption regime under VAT Law No. 04/NA dated 26 December 2006 – “operations relating to banking services, financial institutions” – to a limited exemption scope under VAT Law No. 52/NA dated 23 July 2014 – “deposit interest, loan interest […]
29
Jun
2016
VDB Loi Laos Alert: Determination of minimum and increase in secured salary for social security purpose
Recently, the Minister of Labor and Social Welfare issued Decision No. 1740/LSW dated 25 April 2016 to determine a minimum and increase secured salary for social security purpose. The ceiling of or maximum secured salary for calculation of social security contribution will be increased up to LAK4.5 Million, which is five times of minimum wage […]
20
May
2016
VDB Loi Lao Tax Update: Flash news on Amended Tax Law
Amended Tax Law No. 70/NA adopted 15 December 2015 was published in the Lao Official Gazette of 9 May 2016 and will come into force on 24 May 2016. The new law was issued while Laos is facing a looming budgetary crisis. The new Government is trying to find ways to meet its financial priorities […]
11
Feb
2016
VDB Loi Laos Alert: Application for 2015 Tax Payment Certificate
The Vientiane Capital Tax Division issued Notice No. 0182/TD.VTE on 18 January 2016 regarding the 2015 tax payment certificate application. All domestic and foreign business units under the supervision of the Tax Division are required to submit two sets of documents: The first set of documents must be submitted not later than 1 March 2016: […]
15
Jan
2016
VDB Loi Laos Alert – Presidential Edict on royalty rate for natural resources
Recently, the President of the Lao PDR issued Presidential Edict No. 001/P dated 15 December 2015 (“the Edict”) regarding the royalty rate for natural resources. The Edict imposes royalty rates for natural resources as follows: For general mineral resources – from 2% to 10% of the sales value, depending on the type of mineral. For […]
2
Nov
2015
VDB Loi Laos Alert – Notification on the Inspection and Monitoring of the Existence of Enterprises after Incorporation
Recently, the Ministry of Industry and Commerce (MOIC) issued Notification No. 2121/IC.ERM dated 14 October 2015 (the Notification) regarding the inspection and monitoring of the existence of enterprises after incorporation. The Notification imposes a new reporting requirement on all enterprises. Enterprises are now obliged to submit an annual report to the enterprise registry officials within […]
20
Aug
2015
New services subject to 2% withholding tax in Indonesia
A new regulation1 issued in July seeks to clarify and expand the tax base with regard to services subject to withholding tax at 2% under Article 23 of the Income Tax Law.Taxpayers should be aware of how the changes may impact them, particularly in cases where there has been dispute or doubt with regard to […]
18
May
2015
CLMV Power Update
Welcome to VDB Loi’s CLMV Power Update! Highlights of this issue: Ten things to know about power in Myanmar A practical perspective on foreign financing transactions in Myanmar Key economic terms of Myanmar PPAs Kayah state offers opportunities Land acquisition problems facing IPP investors in Myanmar Myanmar IPPs in search of Terra Firma Salient features […]
6
Feb
2015
VDB Loi Laos Alert – Increase of Social Security Contribution Ratio for Unemployment Benefit
Late December 2014, the Minister of the Ministry of Social Security and Welfare issued Decision No. 3623/MoLW regarding the implementation of unemployment benefits. This Decision enters into force from January 2015 and will be strictly implemented. The Decision instructs business units [including legal registered production, business or service units] and their employees to each contribute […]
30
Jan
2015
Laos Tax Alert: Use of Tax Payment Certificate
Just a reminder that the Cabinet of the Ministry of Finance issued Notification No. 58/MOF.C dated 12 January 2015 (the Notification) regarding the replacement of tax registration certificates with tax payment certificates. The Notification stipulates that each tax authority shall issue a tax payment certificate to replace the tax registration certificate to those business units […]
19
Jan
2015
VDB Loi Tax Alert: Annual tax compliance (Laos)
Recently the Tax Department of the Ministry of Finance issued Notification No. 1018/MF.TD, dated 22 December 2014 (the Notification) regarding submission of annual financial reports. The Notification stipulates that the 2014 financial report (for the year ended 31 December 2014) should be submitted to the tax authorities where the enterprise is registered by 1 March […]
7
Jul
2014
Alert for Indonesia – some good news regarding overpayments
Further to our previous alert regarding changes to the treatment of small overpayments (here), we are pleased to report that the new regulations are operating as planned where overpaid taxes are below the new threshold of IDR 100 million, it is indeed possible to obtain a full refund without the inconvenience and cost of going through a full tax audit.
9
Apr
2014
Small overpayments – to claim or not to claim
As many corporate taxpayers in Indonesia look to finalise their corporate income tax returns within the next couple of weeks for submission before the 30 April deadline (four months after year-end), the following issue, which may have escaped attention, may be worth considering.
4
Mar
2014
VDB Loi Update: Indonesia: Are you paying too much tax?
Which may appear at first glance to be a little controversial. However, rather than courting controversy, the article provides an assessment of situations in which tax burdens exceed those which taxpayers anticipated and some timely assistance for those of you facing overpayment situations in relation to corporate tax and VAT. We discuss in further detail […]
28
Feb
2014
New Quarterly Reporting Obligations
Taxpayers are reminded that the Tax Department issued a Notification late last year in relation to the quarterly profit tax reporting obligations of businesses. Effective from 1 January 2014, businesses who comply with the Lao Accounting System (LAS) must now file quarterly financial statements when declaring their quarterly profit tax obligations. The quarterly financial statements […]
19
Feb
2014
Changes to VAT on Imported Equipment
Article 19 of the Amended VAT Law has entered force. Yes, you read correctly; the Lao Government has taken the unusual step of enacting a single article from the revised VAT Law. On 3 February 2014, a Presidential Decree (No. 06/P) was issued promulgating Article 19 (amended) of the Amended VAT Law in place of Article […]
29
Jan
2014
Important Cambodia Tax Update: Bank pressure results in re-look at market interest rates under Circular 1707
The ink had barely dried on the signing into force of Instructive Circular No. 1707GDT – Tax Assessment on Non-Interest Loans – Below or Above Market Interest Rate (Circular 1707) in October last year, before it was unceremoniously replaced last week by Instruction No. 151 – Instructions on the Determination of Enterprises’ Interest Expenses (Instruction […]
9
Jan
2014
Cambodia Tax Update: Notification 2298 and the need for care when filing your 2013 Tax on Profit Return
We kick off our 2014 tax update series by analyzing Notification 2298, “Notification of the Submission of the 2013 Tax on Profit Returns” that was issued by the General Department of Taxation (GDT) late last month. Perhaps the issue of greatest importance with respect to Notification 2298 is the request to include all related party transactions in […]
11
Dec
2013
VDB Loi Tax Update: Lao MoF moves to modernize tax administration
In an effort to modernize the country’s tax administration, the Lao Ministry of Finance is planning to implement an electronic tax collection system early next year. One key objective of the project is to streamline its management and reduce the compliance burden for business operators in Laos, while also providing a more transparent tax system. […]
11
Dec
2013
Tax Update: Cambodia: Tax Reform in Cambodia – Are we witnessing the first green shoots?
We believe that in years to come post-election 2013 will be seen as the starting point of one of the most significant periods of tax reform in Cambodia. The tax reform that is being contemplated is not just an overhaul of the existing regulations, which may have the effect of throwing out the baby with […]
9
Dec
2013
VDB Loi Tax Update: Cambodia: Property Developers Tax concerns addressed – VAT on land sales clarified
One of the complaints that we hear most frequently from property developers is the disparity in the way in which they are taxed in Cambodia coupled with the lack of consistency in the way that the Cambodian tax regime is enforced. Most foreign property developers will, as a matter of course, register for tax in […]
5
Nov
2013
Same Same, But Different: An update on the Indonesian tax scene
As we approach year-end, we felt it was appropriate to provide a summary of the significant developments in the Indonesian tax scene over 2013. The title of the article is a phrase which may be more familiar to those based in Vietnam, but which we feel sums up the developments quite nicely – some changes, […]
18
Oct
2013
Deadline for Property Tax filing postponed
For another year, the General Department of Taxation (GDT) has deferred the deadline for the filing of Property Tax declaration forms and payment.  Normally due on an annual basis by 30 September, taxpayers now have until 31 October 2013 to register, file and pay, subsequent to the issuance of Notification No. 1721 GDT on 8 […]
5
Oct
2013
VDB Loi Tax Update: "Don't Deem its Over" – the demise of deemed interest rates in Cambodia
The issuance of Instructive Circular – No. 1707GDT – Tax Assessment on Non-Interest Loan – below or above Market Interest Rate (Circular 1707), is probably the most significant tax update to be issued by the General Department of Taxation (GDT) since the introduction of Prakas 599 in July 2009 which clarified the calculation basis and deductibility […]
2
Sep
2013
Foreign Labor Quota Notification
On 6 August 2013, the Phnom Penh Department of Labor and Vocational Training released a notification regarding the registration of foreign employees in Cambodia. The request for quota approval to hire foreign workers for the year 2014 should be submitted between 1 September and 30 November 2013. The request for extension of existing foreign work permits […]
13
Aug
2013
VDB Loi Tax Update: Cambodia Tax Lodgment and Payment Dates Clarified
Historically there has always been a degree of uncertainty in Cambodia as to when to file tax declarations and make tax payments when the official filing and payment date either falls on a weekend or public holiday. For example; most monthly tax returns, with the exception of VAT, are due to be filed by the […]
7
Aug
2013
VDB Loi Tax Update: Lotteries and prizes now taxable in Laos
We’ve taken a brief look at the fairly recent introduction of the 10% income tax on lotteries and prizes in our most recent update published by International Tax Review, which can be downloaded here. While implementing regulations for the Amended Tax Law are still pending, a key expectation here is that where the provider of […]
24
Jun
2013
VDB Loi Tax Update: Stock market tax incentives (Lao Securities Exchange)
As you are probably already aware, the Lao Securities Exchange (LSX) commenced trading early in 2011. Following on from this, key tax incentives have been introduced in an effort to promote the growth of the LSX. We’ve taken a closer look at those tax incentives in our most recent update published by International Tax Review, […]
19
Jun
2013
Alert: Major change in tax audit procedures for related party transactions
Further to our alert last month regarding increased scrutiny by the Indonesian Tax Office, please note that new guidelines have been issued to tax auditors in connection with the audit of related party transactions. These contain significant additional obligations on taxpayers, including the completion of forms outside of normal transfer pricing documentation and the disclosure of data which may not be readily available.
30
May
2013
Flash Alert: Greater Scrutiny of Indonesian Taxes – Are You Prepared?
A number of recent developments in the Indonesian tax landscape mean that it is becoming increasingly important for Indonesian taxpayers to ensure that they are well prepared to withstand tax office scrutiny. The following are of particular relevance: Additional tax office powers: Assessments can be raised outside of the normal tax audit process Focus on […]
30
May
2013
Deductibility of expenses for profit tax in Laos
The Amended Tax Law (2011) brought about notable changes to deductions for profit tax. While most changes have been widely reported, taxpayers may not have been aware of other specifically deductible items – some not strictly expenses – such as: Income from dividends that have already been taxed Recovery of all types of reserves that […]
26
May
2013
Notification on Tax Registration and Renewal
The Ministry of Finance has issued a Notification in relation to tax registration and renewal in light of the introduction of the ‘one-stop service’ under the current investment regulations. We’ve prepared an Analysis on the Notification, which can be downloaded here. Highlights from the Analysis include: No detailed guidelines on the ‘One-Stop Office’ Absence of […]
20
May
2013
Draft decree to loosen restrictions on A&P expenses and introduce thin capitalisation rule
Nowadays, advertising and promotion (A&P) activities play a big role in the business strategy of an enterprise. A&P costs make up a large proportion of the budget of a company, especially for multi­national companies in Vietnam. A ques­tion that arises is whether these costs are fully deductible for corporate income tax (CIT) purposes. In this […]
16
May
2013
Licensing now in place for tax agency services
Before April 12 2013, a real regime taxpayer (a taxpayer registered with both the Ministry of Commerce and General Department of Taxation (GDT)), in Cambodia could simply undertake to meet their tax obligations themselves or alternatively use a representative to perform those obligations for them. In law, and in practice, the taxpayer representative merely required […]
30
Apr
2013
Important Update: Licensing now in place for tax agency services
Author: Clint O’Connell Prior to 12 April 2013 a real regime taxpayer, (a taxpayer registered with both the Ministry of Commerce and General Department of Taxation), in Cambodia could simply undertake to meet their tax obligations themselves or alternatively use a representative to perform those obligations for them. In law, and in practice, the taxpayer […]
21
Mar
2013
Republic of San Marino signs tax treaty with Vietnam
In an effort to avoid the double taxation of international income and thus pro­mote foreign direct investment, Vietnam has concluded double taxation agreements (DTAs) with more than 60 countries to date – the most recent of which was with the Republic of San Marino on February 19 2013, the first of the five smallest juris­dictions […]
21
Mar
2013
New tax on shares gives possible glimpse of future developments
The introduction in December 2012 of a new category of registration yax, under the 2013 Financial Management Law, on share transfers in Cambodian entities gives a possible glimpse as to how the Cambodian tax authorities may deal with existing loopholes in the tax regula­tions regarding the taxation of shares in Cambodian entities.In particular the Cambodian […]
21
Mar
2013
New depreciation method introduced: Activity depreciation
As part of the recent amendment to the tax regulations (the Amended Tax Law No. 05/NA, dated December 20 2011), the Lao legislators have introduced a new depreciation method: Activity depreciation. The less commonly used (for tax purposes) method brings the total number of statutory depreciation options to three; the other two being the pre-existing […]
21
Mar
2013
Flash Alert – Are you in a position to issue valid VAT invoices in April?
For those with current operations in Indonesia, we hope that this alert will provide a timely reminder of the procedures necessary to comply with the latest changes to the VAT regulations and the potential issues which may arise. If you have any questions on this or any other tax developments, please don’t hesitate to contact […]
22
Feb
2013
Luxembourg becomes first EU member to sign tax treaty with Laos
In an effort to avoid the double taxation of international income and thus pro­mote foreign direct investment, Laos has concluded double taxation agreements (DTAs) with 12 countries to date – the most recent of which was with Luxembourg on November 4 2012, the first EU member to do so. The Laos-Luxembourg DTA is pending ratification, […]
25
Jan
2013
What can we expect from the Indonesian Tax Authorities this year?
Below is a link to our first update covering the tax environment in Indonesia.This edition includes some general commentary on developments on the Indonesian tax scene and some predictions for the coming year. Future editions will follow up on these but also provide commentary on any specific developments or regulatory updates, along with feedback on […]
21
Jan
2013
New developments on accessing the zero VAT for international transport companies
The normal practice in international transportation is to consider a bill of lading (B/L) as evidence of a contract between the shipper and the transporter. This is not necessarily the case in Vietnam, however. It is a crucial issue, as companies can qualify for a zero VAT rate on the provision of international transportation services […]
21
Jan
2013
Government eyes piece of the property boom pie
Laos is in the middle of a property boom, and it has caught the attention of the tax collectors and legislators. The result: a 5% income tax on the sale or transfer of land and/or buildings (real property) introduced in the Amended Tax Law No. 05/NA, dated December 20 2011 (amended tax law). This new […]
21
Jan
2013
GDT extends deadline to file 2012 Cambodia property tax returns
In notice 1393, the General Department of Taxation (GDT) announced that it was granting an extension to the filing deadline for 2012 Cambodian property tax returns, through November 30 2012. In addition, the GDT will remain open on Saturdays and Sundays through the deadline to accommodate the rush of late filers at the various provincial/Khan […]
11
Jan
2013
Public Service Fees
By Potim Yun (Partner – Cambodia) To strengthen the enforcement of the Law on Anticorruption, the Royal Government of Cambodia spurred on by the Anti-Corruption Unit (ACU) has undertaken to formalize the processing fees purportedly paid by the public to government officials. As announced, the Ministry of Commerce (MOC) and the Ministry of Economy and […]
11
Jan
2013
Cambodia introduces Registration Tax of 0.1% on Transfer of Shares
On 26 December 2012 the Cambodian Government passed the 2013 Financial Management Law which updated the Registration Tax (or “seal” tax). In some instances the scope of the tax was modified and in others completely new categories of “transfers” that will also be subject to the tax were created.
20
Dec
2012
Ministry Of Finance issues clarification on VAT refunds
By Thuan Pham The issue of VAT refunds, especially in the case of the export of goods or services, is always a notable area of concern for an export enterprise. Subject to certain conditions, a refund request can be processed on a “refund first and review later” or a “review first and refund later” basis. […]
20
Dec
2012
Vietnam Issues New Tax Regulations for Casinos
By Thuan Pham (Director – Vietnam) Since the last draft Decree issued in 2010 which called for public opinions, the Ministry of Finance (“MOF”) has again issued a new draft and is seeking further opinions after conducting research on the casino business model in the region. The draft is expected to be approved within this […]
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