Accounting and legal

Accounting and tax

    Tax obligations in Nepal
  1. The standard corporate tax rate levied on all net profits derived from Nepal is at rates of i) 20% for manufacturing activities and ii) 25% for trading and service activities. Tax returns must be filed before 15th October, although an extension of 3 months may be requested. Companies in Nepal are taxed on worldwide income;
  2. The standard VAT rate levied on provision of goods and services in Nepal is at a flat rate of 13%. VAT is not levied on exports. All VAT returns must be submitted monthly by the 25th of the subsequent month;
  3. Capital gains tax in Nepal is subject to the standard applicable corporate tax rate;
  4. Withholding tax levied on i) dividends is at 5%, ii) royalties, interest, technical fees and commission is at 15% and iii) rental income is at 10%, unless reduced by a double taxation avoidance agreement;
  5. Losses can be carried forward for up to seven years, and losses from petroleum exploration and extradition companies can be carried forward for twelve years;
  6. Customs duty is taxed at a rate from 0-80% of the transaction value, while rates of excise duty range from 0-40%;
  7. Employers must submit to the relevant authorities social security contributions on behalf of their employees at 10%;
  8. Nepal Rastra Bank determines foreign exchange controls and foreign investors can freely repatriate profits after tax to other countries;
  9. Nepal has signed double tax avoidance treaties with 7 countries including China, India, Korea Republic, Mauritius, Norway, Thailand and Sri Lanka;
  10. Healy Consultants Compliance Department will assist our Clients with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records and iv) preparing forecasts, budget and sensitivity analysis;
  11. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Contact us

For additional information on our company registration services in Nepal, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Olivia Stanciu, directly:
nepal ministry of finance nepal ministry of commerce and supplies the institute of chartered accountants of nepal federation of Nepalese Chammers of Commerce & Industry (FNCCI) nepal employees provident fund confederation of Nepalese industries nepal accounting standards board nepal rastra bank