Income Tax, VAT & PAN Services in Nepal
Complete tax compliance under one roof
Taxation in Nepal is governed primarily by the Income Tax Act 2058 and the Value Added Tax Act 2052, administered by the Inland Revenue Department (IRD). Every business needs a Permanent Account Number (PAN); businesses above the turnover threshold — or in certain listed sectors — must also register for VAT and file returns every month.
We handle the full cycle: registration, monthly filings, withholding (TDS), advance tax installments, the annual income tax return, and representation before the tax office when queries or assessments arise.
Services we provide
- PAN registration for individuals, firms, and companies (and business PAN for freelancers)
- VAT registration, monthly VAT return filing, and VAT refund claims where eligible
- TDS computation, deposit, and e-TDS return filing on the IRD portal
- Annual income tax returns (D-01 to D-04 as applicable) with full self-assessment workings
- Advance/estimated tax calculation and installment filing
- Tax clearance certificates for tenders, banking, visas, and renewals
- Responding to IRD notices, assessments, and administrative review
Key tax rates in Nepal
| Tax | Rate |
|---|---|
| Standard corporate income tax | 25% |
| Banks, financial institutions & insurance | 30% |
| Special industries (manufacturing) & IT | 20% |
| Value Added Tax (VAT) | 13% |
| TDS on service fees (VAT-registered service provider) | 1.5% of invoice |
| TDS on service fees (non-VAT / PAN invoice) | 15% |
| TDS on house/building rent (to individuals: to IRD via rent tax) | 10% |
| TDS on contract payments above NPR 50,000 | 1.5% |
| Dividend distribution (final withholding) | 5% |
The deadlines that matter
| Obligation | Deadline |
|---|---|
| VAT return & payment | Within 25 days of the end of each Nepali month |
| TDS deposit & e-TDS return | Within 25 days of the end of each Nepali month |
| Estimated tax installments | 40% by Poush end, 70% by Chaitra end, 100% by Ashadh end (of estimated liability) |
| Annual income tax return | Within 3 months of fiscal year end (Ashoj end); 3-month extension available on application |
Who must register for VAT?
VAT registration is compulsory once annual turnover crosses the threshold set by the IRD — NPR 5 million for goods, and NPR 3 million for services or mixed transactions — and for businesses dealing in certain listed goods and services regardless of turnover. Voluntary registration below the threshold is possible and often sensible for businesses selling to VAT-registered customers.
Registered businesses must issue VAT invoices, maintain purchase and sales registers, and file returns even for months with no transactions — a nil return is still a return, and skipping it still attracts fines.
Local help, national reach
From our office in Tilottama, Butwal, we file for businesses across Rupandehi and the Lumbini Province, and remotely for clients across Nepal. If the IRD calls, writes, or assesses, you don't face it alone — we prepare the response, attend the hearing, and defend the numbers we filed.
Frequently asked questions
How do I get a PAN in Nepal?
Apply through the IRD Taxpayer Portal or at your local Inland Revenue Office with citizenship (or company registration documents), photos, and business details. Rolacon prepares and submits the application and typically has a business PAN issued within a few working days.
What is the penalty for late VAT filing?
Late VAT returns attract a fine per return plus interest on unpaid tax, and persistent non-filing can lead to market monitoring, assessment, and suspension of your VAT registration. Filing nil returns on time avoids all of it — this is the cheapest compliance there is.
When must TDS be deposited?
Tax withheld in a Nepali month must be deposited and the e-TDS return submitted within 25 days of the end of that month. We generate the submission number on the IRD portal, file the return, and give you the deposit voucher for your records.
Can you handle a tax assessment or IRD notice?
Yes. We review the notice, reconcile the IRD's numbers against your books, prepare the written response with supporting documents, and represent you through administrative review. The earlier you bring us the notice, the more options you have.
Do freelancers earning in foreign currency pay tax in Nepal?
Yes, but at favorable rates — income from exported services received in convertible foreign currency through banking channels is generally subject to a low final withholding (currently 5%) rather than normal slab rates. We advise on the correct treatment and documentation so the concession actually applies.
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