Nepal VAT

Nepal VAT Return Skill v2.0

Verified rates & thresholds (accountant-reviewed)

Reviewed against the cited tax authorities by Ashish Bista on 2026-06-06. Items flagged for further clarification are tracked separately and excluded here.

VAT (IRD Return)

• Standard rate — 13%
• Zero rate — 0% (exports, goods to SEZ)
• Exempt — Basic agriculture, education, healthcare, financial services, public transport (VAT Act 2052 Sch.1)
• Concessional rate — 5% on electricity (above 50 units) AND ride-sharing / ride-hailing services (Finance Act 2083 (amended VAT Act 2052 s.7))
• Registration threshold — goods/carriage — NPR 5,000,000 (12-month turnover) (VAT Act 2052 s.10 (Baker Tilly/PKF))
• Registration threshold — services or mixed — NPR 3,000,000 (raised from NPR 2M eff. 16 Jul 2024) (VAT Act 2052 s.10 (Baker Tilly))
• Filing frequency — Monthly, within 25 days of the end of each Nepali calendar month (VAT Act 2052 (Baker Tilly))
• Imports — VAT at 13% on CIF plus duty (VAT Act 2052)
• Reverse charge — non-resident services — Self-assess 13% (VAT Act 2052)
• Input tax credit — Valid VAT invoice with PAN; business purpose; IRD-approved billing software (VAT Act 2052)
• Blocked input — Personal consumption, entertainment, passenger vehicles (VAT Act 2052)
• Digital Payment VAT Discount — 10% instant VAT refund directly to consumers for making digital/cashless payments (Finance Act 2083 / VAT Act 2052)
• VAT Bill Lottery Scheme — Every VAT bill automatically acts as a lottery ticket for consumers (Budget Speech 2083/84)
• Unpaid VAT / Tax Amnesty Settlement — Settle pending VAT cases by paying outstanding principal tax + 1% fee (all other penalties waived) (Finance Act 2083 (Section 41/44))

Section 1 — Quick reference

• Country — Nepal (Federal Democratic Republic of Nepal)
• Standard rate — 13%
• Zero rate — 0% (exports, goods to SEZ)
• Exempt — Basic agricultural products, education, healthcare, financial services, public transport
• Return form — VAT return (monthly, via IRD e-filing)
• Filing portal — https://ird.gov.np (IRD e-filing)
• Authority — Inland Revenue Department (IRD)
• Currency — NPR (Nepalese Rupee)
• Filing frequency — Monthly (by 25th of following month)
• Deadline — 25th of the month following the tax period
• Registration threshold — NPR 5,000,000 (goods/carriage) · NPR 3,000,000 (services or mixed) — services/mixed raised from NPR 2M eff. Shrawan 1, 2081 (16 Jul 2024)
• Companion skill — vat-workflow-base v0.1 or later — MUST be loaded
• Validated by — Verified by Ashish Bista (ICAN: 1765) on 2026-06-06

Section 1 quick reference table

Field	Value
Country	Nepal (Federal Democratic Republic of Nepal)
Standard rate	13%
Zero rate	0% (exports, goods to SEZ)
Exempt	Basic agricultural products, education, healthcare, financial services, public transport
Return form	VAT return (monthly, via IRD e-filing)
Filing portal	https://ird.gov.np (IRD e-filing)
Authority	Inland Revenue Department (IRD)
Currency	NPR (Nepalese Rupee)
Filing frequency	Monthly (by 25th of following month)
Deadline	25th of the month following the tax period
Registration threshold	NPR 5,000,000 (goods/carriage) · NPR 3,000,000 (services or mixed) — services/mixed raised from NPR 2M eff. Shrawan 1, 2081 (16 Jul 2024)
Companion skill	vat-workflow-base v0.1 or later — MUST be loaded
Validated by	Verified by Ashish Bista (ICAN: 1765) on 2026-06-06

Conservative defaults

Ambiguity	Default
Unknown rate on a sale	13%
Unknown VAT status of a purchase	Not deductible
Unknown counterparty location	Domestic Nepal
Unknown business-use proportion	0% recovery

Section 2 — Required inputs and refusal catalogue

Required inputs

Minimum viable — bank statement for the month. Acceptable from: Nabil Bank, NIC Asia Bank, Nepal Bank, Rastriya Banijya Bank, Himalayan Bank, Everest Bank, Standard Chartered Nepal, or any other.

Nepal-specific refusal catalogue

• R-NP-1 — Special Economic Zone entity — Trigger: client in SEZ. Message: "SEZ entities have special VAT treatment. Please escalate."
• R-NP-2 — Hydropower and infrastructure projects — Trigger: client with government infrastructure concession. Message: "Infrastructure projects have bespoke VAT exemptions. Please escalate."

Section 3 — Supplier pattern library

3.1 Nepalese banks (fees exempt — exclude)

Nepalese banks pattern table

Pattern	Treatment	Notes
NABIL, NABIL BANK	EXCLUDE for bank charges	Exempt
NIC ASIA, NIC ASIA BANK	EXCLUDE for bank charges	Same
NEPAL BANK, RASTRIYA BANIJYA	EXCLUDE for bank charges	Same
HIMALAYAN BANK, EVEREST BANK	EXCLUDE for bank charges	Same
STANDARD CHARTERED NP	EXCLUDE for bank charges	Same
INTEREST, LOAN, REPAYMENT	EXCLUDE	Out of scope

3.2 Government (exclude)

Government pattern table

Pattern	Treatment	Notes
IRD, INLAND REVENUE	EXCLUDE	Tax payment
CUSTOMS, NEPAL CUSTOMS	EXCLUDE	Duty
SSF, SOCIAL SECURITY FUND	EXCLUDE	Social security
COMPANY REGISTRAR, OCR	EXCLUDE	Registration fee

3.3 Utilities

Utilities pattern table

Pattern	Treatment	Notes
NEA, NEPAL ELECTRICITY	Domestic 13%	Electricity
KUKL, KATHMANDU WATER	Domestic 13%	Water
NTC, NEPAL TELECOM, NCELL	Domestic 13%	Telecoms

3.4 Digital payments

Digital payments pattern table

Pattern	Treatment	Notes
ESEWA, KHALTI, IME PAY	EXCLUDE for fees	Financial service fees exempt
FONEPAY	EXCLUDE for fees	Same

3.5 SaaS and international services

SaaS and international services pattern table

Pattern	Treatment	Notes
GOOGLE, MICROSOFT, META, AWS	Self-assess 13%	Non-resident
ZOOM, SLACK, CANVA	Self-assess 13%	Same

3.6 Payroll and exclusions

Payroll and exclusions pattern table

Pattern	Treatment	Notes
SALARY, WAGES, TLAB	EXCLUDE	Outside VAT scope
OWN TRANSFER, INTERNAL	EXCLUDE	Internal
CASH WITHDRAWAL	TIER 2 — ask	Default exclude

Section 4 — Worked examples

Example 1 — Standard domestic sale at 13%

Input line: 05.04.2026 ; KATHMANDU TRADING ; CREDIT ; Invoice NP-041 ; NPR 113,000

Reasoning: Domestic. 13%. Net = NPR 100,000, VAT = NPR 13,000.

Example 1 table

Date	Counterparty	Gross	Net	VAT	Rate	Field	Default?	Excluded?
05.04.2026	KATHMANDU TRADING	+113,000	+100,000	13,000	13%	Output	N	—

Example 2 — Export, zero-rated

Input line: 15.04.2026 ; INDIAN BUYER LTD ; CREDIT ; Exported handicrafts ; NPR 500,000

Example 2 table

Date	Counterparty	Gross	Net	VAT	Rate	Field	Default?	Excluded?
15.04.2026	INDIAN BUYER LTD	+500,000	+500,000	0	0%	Zero-rated	N	—

Example 3 — Non-resident digital service

Input line: 18.04.2026 ; GOOGLE ; DEBIT ; Google Ads ; NPR -23,000

Example 3 table

Date	Counterparty	Gross	Net	VAT	Rate	Field	Default?	Excluded?
18.04.2026	GOOGLE	-23,000	-23,000	2,990	13%	Output + Input	N	—

Example 4 — Bank charges

Input line: 30.04.2026 ; NABIL BANK ; DEBIT ; Service charge ; NPR -500

Example 4 table

Date	Counterparty	Gross	Net	VAT	Rate	Field	Default?	Excluded?
30.04.2026	NABIL BANK	-500	—	—	—	—	N	"Exempt"

Section 5 — Tier 1 classification rules (compressed)

5.1 Standard rate 13% — Default for all taxable supplies.

• Standard rate default — Default for all taxable supplies.

5.2 Zero rate — Exports, supplies to SEZ.

• Zero rate — Exports, supplies to SEZ.

5.3 Exempt — Basic agriculture, education, healthcare, financial services, public transport.

• Exempt — Basic agriculture, education, healthcare, financial services, public transport.

5.4 Input tax credit — Valid VAT invoice with PAN required. Business purpose.

• Input tax credit — Valid VAT invoice with PAN required. Business purpose.

5.5 Blocked input — Personal consumption, entertainment, passenger vehicles.

• Blocked input — Personal consumption, entertainment, passenger vehicles.

5.6 Imports — VAT at 13% on CIF plus duty.

• Imports — VAT at 13% on CIF plus duty.

5.7 Reverse charge — Non-resident services: self-assess 13%.

• Reverse charge — Non-resident services: self-assess 13%.

5.8 VAT billing software — IRD requires use of approved billing software for invoice generation.

• VAT billing software — IRD requires use of approved billing software for invoice generation.

Section 6 — Tier 2 catalogue (compressed)

6.1 Vehicle costs — Default: 0%.

• Vehicle costs — Default: 0%.

6.2 Entertainment — Default: block.

• Entertainment — Default: block.

6.3 SaaS entities — Default: self-assess 13%.

• SaaS entities — Default: self-assess 13%.

6.4 Cash withdrawals — Default: exclude.

• Cash withdrawals — Default: exclude.

6.5 Mixed-use expenses — Default: 0% recovery.

• Mixed-use expenses — Default: 0% recovery.

Section 7 — Excel working paper template

Per vat-workflow-base Section 3, with Nepal fields: Output 13%, Zero-rated, Exempt, Input domestic, Input imports, Net VAT.

Section 8 — Bank statement reading guide

Nabil and NIC Asia exports CSV. NPR primary. Devanagari script descriptions possible — treat transliterated equivalents the same. Internal transfers: exclude. Convert foreign currency at Nepal Rastra Bank rate.

Section 9 — Onboarding fallback

9.1 PAN — "What is your Permanent Account Number?"

"What is your Permanent Account Number?"

9.2 Filing period — Monthly. "Which month?"

Monthly. "Which month?"

9.3 Industry — "What does the business do?"

"What does the business do?"

9.4 Exports — "Do you export?"

"Do you export?"

9.5 Credit brought forward — Always ask.

Always ask.

Section 10 — Reference material

Sources

1. Nepal Value Added Tax Act 2052 (1996, as amended). 2. IRD guidelines. 3. IRD e-filing portal.

Known gaps

1. SEZ entities refused. 2. Hydropower/infrastructure refused.

Change log

• v2.1 (June 2026): Added jurisdiction/verification frontmatter; added VAT registration thresholds (NPR 5M goods / 3M services, FY 2082/83); removed duplicate disclaimer; 13% rate re-confirmed for FY 2082/83.
• v2.0 (April 2026): Full rewrite to Malta v2.0 ten-section structure.

Disclaimer

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