What is Nepal Value Added Tax (VAT)?
Value Added Tax (VAT) in Nepal is a multi-stage consumption tax levied at a flat statutory rate of 13% on taxable goods and services, administered by the Inland Revenue Department (IRD).
VAT Mathematics: Adding vs Removing 13%
- Adding 13% VAT to Net Price: Gross = Net × 1.13
- Extracting 13% VAT from Gross Price: Net = Gross ÷ 1.13, VAT Amount = Gross − Net
PAN vs VAT Registration Thresholds
Any business engaging in commercial activities must obtain a Permanent Account Number (PAN). Businesses dealing in taxable goods must register for VAT if annual turnover exceeds NPR 50 Lakhs (Goods) or NPR 20 Lakhs (Services & Consultancies).