Value Added Tax (VAT) in Nepal is governed by the Value Added Tax Act 2052 and administered by the Inland Revenue Department (IRD). If your business is VAT-registered, understanding your filing obligations is essential to avoid penalties.
VAT registration is mandatory if your annual taxable turnover exceeds NPR 5 million for goods or NPR 2 million for services. The standard VAT rate is 13%. Some goods and services are zero-rated or exempt.
VAT returns in Nepal are filed bi-monthly. Returns for odd months (Shrawan, Ashoj, Mangsir, Magh, Chaitra, Jestha) are due on the 25th of the following month. IRD processes VAT filings through its online portal and taxpayers must maintain proper books of accounts and VAT bills to support their returns.
Input VAT credit allows you to offset VAT paid on business purchases against VAT collected on sales. Proper documentation of all purchase invoices is essential to claim input tax credit.
Common errors we see include failure to register for VAT despite crossing the threshold, claiming input VAT on non-business expenses, and missing filing deadlines. Late filing attracts penalties under the VAT Act.
If you are unsure about your VAT obligations or want to ensure your returns are filed correctly, our tax specialists are here to help.
Tax & Compliance
VAT Filing in Nepal: What Every Business Owner Must Know
6 min read
Nepal's VAT system under the VAT Act 2052 requires registered businesses to file returns bi-monthly. Here is what you need to know to stay compliant and avoid penalties.
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Swift Support Team
Business Consulting Specialists
The Swift Support Solutions team is made up of certified business consultants, financial advisors, tax specialists, and operations professionals based in Kathmandu, Nepal.