Corporate Income Tax (CIT) – Profit tax is levied on income. Small and medium enterprises that are not registered under the Value Added Tax (VAT) system are subject to lump-sum tax instead of profit tax. This applies to enterprises which have annual revenue of less than LAK 12 million. A 24% profit tax rate applies to both domestic and foreign businesses, except for companies registered on the Lao Stock Exchange, which benefit from a 5% reduction of the normal rate for a period of 4 years from the date of registration on the Stock Exchange. After this period, the normal profit tax rate applies. A 26% profit tax rate applies to companies whose business is to produce, import, and supply tobacco products. 2% of the tax paid by tobacco companies shall be contributed to the Cigarette Control Fund (Article 46 of the Law on Tobacco Control). Small and medium enterprises that are not registered under the VAT system pay lump-sum tax at progressive rates between 3%-7%, depending on the nature of the business and its revenue.