VAT Filing in Nepal — Monthly Returns at IRD
VAT-registered businesses in Nepal must file monthly VAT returns at the Inland Revenue Department (IRD) by the 25th of each month. The return summarizes all sales (output VAT) and purchases (input VAT) for the month, and the net VAT is either paid to IRD or carried forward as a credit.
How VAT Return Works
Each month, a VAT-registered business must calculate:
- Output VAT: VAT charged on your sales (13% of taxable sales)
- Input VAT: VAT paid on your business purchases (13% of taxable purchases from VAT-registered suppliers)
- Net VAT: Output VAT minus Input VAT. If positive, pay to IRD. If negative, carry forward as a credit to the next month.
Step-by-Step Process
- 1
Collect sales and purchase invoices
Gather all sales invoices issued and all purchase invoices received during the month. Ensure each invoice has a proper VAT number.
- 2
Prepare VAT register
Record all taxable sales and purchases in a VAT sales register and purchase register. Calculate output and input VAT for the month.
- 3
Log into IRD taxpayer portal
Access the IRD online taxpayer portal using your PAN and password. Navigate to the VAT return section.
- 4
File the return online
Enter the monthly figures — taxable sales, taxable purchases, output VAT, input VAT, and net payable. Submit the return before the 25th.
- 5
Pay net VAT (if applicable)
If net VAT is payable, deposit the amount at a designated commercial bank or through online banking. Upload the bank payment receipt to the IRD portal.
- 6
Keep records for 5 years
All VAT invoices, returns, and payment receipts must be kept for 5 years as IRD may audit any past period.
Penalties for Late VAT Filing
| Item | Fee |
|---|---|
Penalty for late filing On the unpaid VAT amount | 0.1% per day |
Interest on late payment On outstanding VAT | 15% per annum |
Penalty for no filing Minimum penalty even if nil return | NPR 2,000 |
File Even If You Have Zero Sales
If your business had no transactions in a month, you must still file a NIL return by the 25th. Failure to file any return (even NIL) attracts automatic penalties. Chartered Corporate files returns for all our clients — including NIL returns — ensuring no penalties are ever incurred.Need help with this process? Chartered Corporate Business Consulting handles it all for you — from start to finish.