Laos Issues Tax Obligations for Non-Resident E-commerce and Digital Platform Providers

On February 24, 2022, Laos’ Ministry of Finance issued notification No. 0541/MOF on the implementation of tax obligations for non-resident digital platforms and e-commerce service suppliers.

Underneath the brand new guidelines, non-resident e-commerce and digital platform suppliers should register for a tax identification quantity (TIN) by way of a web based portal to file and pay their taxes. Additional, they need to register and pay value-added tax (VAT) if their annual income meets a sure threshold.

The decree additionally covers the tax necessities for resident people who earn an earnings from e-commerce or digital service platforms and the quantity of taxes they should pay.

What are non-resident e-commerce and digital platform suppliers?

Notification No. 0541/MOF states that non-resident, e-commerce marketplaces, and digital platform providers embody:

• Suppliers of on-line music, movies, and video games from suppliers, similar to TikTok, YouTube, and Zoom;
• Streaming providers suppliers, similar to Disney+, Netflix, and AppleTV+;
• E-commerce providers for sellers and patrons, similar to Lazada and Shopee;
• Internet marketing platforms starting from Google to Fb; and
• On-line reserving platforms for journey and lodging.

Tax obligations

The non-resident corporations should register for a TIN via the TaxRIS on-line portal. Additional, non-resident corporations should register and pay VAT if their income is over 400 million LAK (US$33,600). There may be additionally a further tax on earnings.

The due dates for submitting and paying VAT for e-commerce and digital service suppliers are twice per 12 months; January 20 and July 20. Non-resident corporations could also be requested for added details about the e-commerce providers they supply by the Ministry of Finance.

Resident people who earn an earnings via e-commerce channels or digital providers shall be topic to a two % earnings tax charge.

E-commerce suppliers with common gross sales in Laos should pay and file their earnings tax on the 20^th of each month whereas these with periodic gross sales should pay and file inside 15 working days.

A unbroken pattern in ASEAN

The taxing of e-commerce and digital gamers in Laos is a part of a unbroken pattern in ASEAN with Indonesia, Singapore, Malaysia, and Vietnam additionally implementing digital taxes.

Indonesia

Indonesia issued Regulation No. 48/PMK.03/2020 in Could 2020 and imposes a 10 % VAT on non-resident corporations.

Additional, authorities regulation 50 of 2020, which was issued in the identical month obligated international e-commerce organizers to ascertain a consultant workplace in Indonesia if they’d accomplished over 1,000 transactions with Indonesian shoppers inside a 12 months or delivered over 1,000 packages to Indonesian shoppers inside a 12 months.

Indonesia’s digital economic system — already the most important in ASEAN — is anticipated to have a gross merchandise worth (GMV) of US$146 billion in 2025. E-commerce is the most important progress driver and will see its GMV worth attain US$104 billion additionally by 2025.

Malaysia

Malaysia has been imposing a six % digital service tax on international digital service suppliers since January 2020. Nevertheless, they should have an annual turnover of 500,000 ringgit (US$118,000) or extra to be taxed.

The Royal Malaysian Customs Division supplies just a few examples of digital providers which embody:

• On-line licensing of software program;
• Firewalls;
• Cellular functions and video video games;
• Provision of e-books, movies, music, streaming providers, subscription-based media;
• Search engines like google and social networks;
• Web site internet hosting providers, cloud storage providers;
• Internet marketing platforms;
• Web-based communications; and
• On-line studying providers.

Singapore

Singapore’s Abroad Vendor Registration (OVR) regime, which was issued in January 2020, obligates international digital service suppliers to register and pay for items and providers tax (GST) of seven %. Though from January 1, 2023, the GST charge shall be elevated to eight % and to 9 % for 2024.

The international digital service supplier must have an annual turnover of S$1 million (US$733,000) and promote greater than S$100,000 (US$73,000) value of digital providers to Singaporean shoppers in a 12-month interval to be taxed.

Vietnam

Underneath Vietnam’s Round 80, international e-commerce platforms partaking in business-to-consumer (B2C) actions and incomes income in Vietnam should pay native taxes. Beforehand, the tax was utilized to business-to-business transactions. Round 80 was issued in January 2022.

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