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Laos: Update on tax registration and renewal

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Daniel Harrison

The Ministry of Finance has issued Notification No. 3086/MoF, dated March 19 2013 on tax registration and renewal in light of the introduction of the one-stop service under the current investment regulations. Following on from the issuance of Decision No. 2411/MPI, dated October 7 2011 regarding the organisation and activities of the One-Stop Investment Office (One-Stop Office), the Notification comes as a consequence of guidelines for the one-stop service not being able to be issued on a timely basis.

With regard to tax administration, the absence of detailed guidelines on the one-stop service has seen tax authorities at the central, provincial and district levels carrying out their roles and duties differently.

Issues faced

The process for issuing registration certificates through the one-stop service has only been implemented at the central level. However, enterprises established through the One-Stop Office are able to operate nationwide.

As a result, local tax authorities have experienced difficulties managing enterprises and taxpayers. Furthermore, the tax administration office has received insufficient information following the registration of enterprises through the One-Stop Office.

Consequently, investors registering in this manner believed that the registration process had been completed in full, and thus they may not have contacted the tax administration office and also were not aware of their tax obligations.

To resolve the difficulties, the tax administration office has issued this Notification instructing the tax divisions of the capital and provinces – effectively nationwide – in relation to the management of enterprises and taxpayers for tax registration and annual renewal as follows.

Enterprises approved pre-One-Stop Office

Both domestic and foreign enterprises that have been granted long-term investment periods and received a tax registration certificate (TRC) issued before the implementation of the One-Stop Office (before October 2011) shall continue to submit financial statements and other relevant supporting documents to renew their TRC annually – and obtain an annual tax payment certificate (TPC) – until full implementation of the One-Stop Office.

Enterprises approved post-One-Stop Office

Both domestic and foreign enterprises that have been granted long-term investment periods after the implementation of the One-Stop Office – and for future enterprises – are to use their enterprise registration certificate (ERC) or concession license (CL) on a continuing basis, moving forward. In this instance, TRCs will cease to be issued or renewed.

However, the tax authorities will issue an annual TPC based on submission of financial statements and other relevant supporting documents, in order to provide certification that tax obligations have been met in the event of monitoring and inspection by the relevant sectors/authorities.

Compliance obligations

All domestic and foreign enterprises must submit their financial statements and other relevant supporting documents for TRC renewal (if applicable) and obtaining an annual TPC to the tax authorities no later than March 31 of each year.

Tax identification number

The tax identification number (TIN) of enterprises engaged in concession activities or general activities shall be granted in the CL or ERC, respectively, by the central or local level authorities, for enterprise registration applications submitted after the implementation of the One-Stop Office and onwards.

Violations

Any enterprise found to be operating without a valid enterprise identification number (EIN) or TIN, or which has failed to pay taxes, failed to submit annual financial statements or holds no TPC for the previous year(s) shall be subject to penalties and other measures in accordance with the relevant laws and regulations.

Daniel Harrison (daniel.harrison@vdb-loi.com)
VDB Loi

Tel: +85 62 145 4679

Website: www.vdb-loi.com

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