Tax
Income Tax Act 2058 with rates set annually by the Finance Act
The Income Tax Act 2058 (2002) governs direct tax; the standard corporate rate is 25 percent with higher rates for banks, insurers and tobacco. VAT is 13 percent under the VAT Act 2052.
Key rules
- Deadline — Income tax return within three months of the mid-July fiscal year end, extendable by three months
- Deadline — Monthly VAT return by the 25th of the following Nepali month
- Deadline — Advance tax in three instalments
Governing law
- Income Tax Act, 20582002
- Value Added Tax Act, 20521996
- Finance Actannual
- Excise Act, 2058
In practice
Nepal's fiscal year runs mid-July to mid-July on the Bikram Sambat calendar, and the annual Finance Act can change rates each year, so any rate cited should be checked against the current year's Act. Permanent Account Number registration is mandatory for business. Withholding rates on dividends, interest and service fees are significant for foreign investors, and treaty relief requires prior approval before remittance.