VAT Registration in Nepal — IRD Process & Thresholds
Value Added Tax (VAT) registration in Nepal is mandatory for businesses with annual turnover exceeding NPR 50 lakh (goods) or NPR 30 lakh (services). Voluntary registration is also allowed for businesses below these thresholds. VAT is administered by the Inland Revenue Department (IRD).
Who Must Register for VAT in Nepal?
Under the Value Added Tax Act 2052 BS, VAT registration is compulsory if:
- Annual turnover from the sale of goods exceeds NPR 50 lakh
- Annual turnover from services exceeds NPR 30 lakh
- Importing goods for commercial purposes (VAT collected at customs)
Businesses below these thresholds may voluntarily register to claim input VAT credits — beneficial if you purchase goods/services from VAT-registered suppliers.
VAT-Exempt and Zero-Rated Items
Exempt (no VAT collected, no input credit): Basic foods, education services, healthcare services, public transport.
Zero-rated (0% VAT, input credit claimable): Exports — exporting businesses can claim back all input VAT paid on business purchases.
Step-by-Step Process
- 1
Obtain PAN first
PAN registration is a prerequisite for VAT registration. If you don't have a PAN, register first at IRD.
- 2
Gather required documents
Prepare company registration certificate, PAN card, citizenship of directors, office address proof, and recent bank statement.
- 3
Apply at IRD office
Submit the VAT registration application at the nearest IRD office (or through the online portal where available). IRD may conduct a field visit.
- 4
VAT registration certificate issuance
IRD issues a VAT Registration Certificate with your VAT number. Display this certificate at your business premises.
- 5
Set up VAT accounting system
Establish a system to track sales invoices, purchase invoices, and VAT collected/paid. All VAT invoices must include your VAT number.
- 6
File monthly returns
File monthly VAT returns on the IRD portal by the 25th of each month. Include all sales and purchases for the month.
Required Documents
- PAN certificate from IRD
- Company registration certificate (OCR) or firm registration
- Citizenship certificates of directors/proprietors
- Office address proof (rental agreement or ownership deed)
- Bank account statement (3 months)
- Nature of business description
- Specimen signature of authorized person
Late VAT Filing Attracts Penalties
Missing the 25th-of-the-month VAT filing deadline results in automatic penalties and interest. After 3 consecutive missed returns, IRD can initiate an audit. Chartered Corporate handles monthly VAT filing for 100+ clients — ensuring zero late filings.Need help with this process? Chartered Corporate Business Consulting handles it all for you — from start to finish.