Complete VAT Guide for Nepal

Value Added Tax (VAT) is an indirect tax levied on the supply of goods and services in Nepal. The standard VAT rate is 13%, implemented by the Inland Revenue Department (IRD).

Businesses with annual turnover exceeding NPR 20 lakh (2 million) must mandatorily register for VAT. Businesses below this threshold can register voluntarily.

• Visit your local Inland Revenue Department (IRD) office
• Submit application form with required documents
• Provide business location verification
• Obtain VAT registration certificate (usually within 7-15 days)
• Start issuing VAT-compliant invoices

VAT returns must be filed monthly by the 25th of the following month. Payment of VAT collected must be made within the same deadline. Late filing attracts penalties.

• Sequential invoice numbering
• Seller's PAN and VAT registration number
• Buyer's PAN (if registered)
• Date of transaction
• Description of goods/services
• Taxable amount, VAT amount, and total
• Authorized signature/stamp

Registered businesses can claim input VAT credit on purchases used for taxable business activities. Maintain proper purchase invoices to support credit claims.