Nepal Tax

Contents 1.

Heads of Income cfosf zLif{sx? sx? .......................................................................................................... 2

2.

sf/ ....................................................................................................... 2 Types of Tax payer s/bftfsf k|sf/

3.

Tax rates for individual Psn JolQmnfO{ s/sf b/x? ................................................................................... 3

4.

Presumptive taxation k"j{ lgwf{l/t l/t s/ ................................................................................................... 8

5.

Entities lgsfo .................................................................................................................................... 9

a.

Rate of tax for entities lgsfosf] cfodf nfUg] s/sf] b/ ........................................................................ 9

b.

lnotk"0f{ s/sf b/x? ......................................................................... 10 Concessional Rates of Tax ;x'lnotk"

c.

Deductions for business s§[ L x'g] g] /sdx?...................................................................................... 14

d.

Depreciation Rates x|f;sf f;sf b/x? ................................................................................................. 15

6.

Double Tax Avoidance Agreements (tax rates) bf]xf] xf]/f] /f] s/ d'lQm lQm ;Demf}tf tf -s/sf b/x?_ ................................ 16

7.

TDS provisions ............................................................................................................................... 16

a.

TDS on employment /f]huf/Ldf huf/Ldf s/ s§L ....................................................................................... 16

b.

Tds rates s/ s§Lsf b/ ............................................................................................................... 16

c.

TDS on disposal of shares, land and buildings etc z]o/, o/, 3/ hUuf OToflbsf] lg;{udf udf s/ s§L ................. 18

d.

Payments for which TDS not required to be deducted e'QmfgL QmfgL ub{f s/ s§L ug' { gkg] { vr{x? x? .............. 19

e.

QmfgL .................................................................................. 20 Deposition of TDS s6[ L ul/Psf] s/sf] e'QmfgL

f.

df0fkq pknAw u/fpg' kg] { .................................................... 20 Distribution of TDS certificate s/ s§L] k|df0fkq

8.

Due date for Returns of income cfo ljj/0f bflvnf ug{ ' kg] { ldlt ............................................................. 21

9.

Due dates amount to be deposited while filing estimated tax ls:tfaGbLdf cg'dflgt dflgt s/ bflvnf ug' { kg] { ldlt / kl/df0f................................................................................. 21

10. Interest and Penalties z'Ns Ns tyf Jofh ................................................................................................. 22 11. Special Provision for women through FinanceAct . dlxnfsf] nflu cfly{s P]g åf/f ljz]ifif Joj:yf ................... 23 12. Health service tax :jf:Yo ;]jf jf s/ ....................................................................................................... 23 13. Education service fee lzIff ;]jf jf z'Ns Ns ................................................................................................. 24 14. Contact .......................................................................................................................................... 25

Banskota & Co., Chartered Accountants Tel: +977-1-4440935, e-mail: [email protected]

Nepal tax provision 2011-12 Page 1

1. Heads of Income h uf/Laf6 cfDbfgL - Income from Employment /f]huf/Laf6 -

Income from Business Joj;foaf6 cfDbfgL Income from investment nufgLaf6 cfDbfgL Income from windfall gains cfsl:ds nfeaf6 cfDbfgL

2. Types of Tax payer

Natural Person Individual Psn JolQm  Couple bDklQ 5gf} 6 

ug]{

k|fs[ fs[lts lts JolQm 

6 L Sole proprietorship Psnf}6L kmd{

Entity b f/L k{ md Partnership firm ;fem]bf/L  i6 Trust 6«i6  Company sDkgL  V.D.C. uf=lj=;  Municipality gu/kflnsf  D.D.C. lh=la=;  k fn ;/sf/ Government of Nepal g]kfn  z L ;/sf/ Foreign Government lab]zL  An organization established  under any treaty or agreement

cGt/fli6«o ;+u7g u 7g 

Foreign Permanent Establishment

lab]zL z L :yfoL ;+:yfkg : yfkg



3. Tax rates for individual a. Slab For Individual/ Couple/ Sole proprietorship business Psn JolQm / bDklQ / Psnf}6L 6 L kmd{nfO{ :Nofa For individual

For couple

Psn JolQm

bDklQ

Up to 160,000

Up to 200,000

?= !^),))) ;Dd

?= @)),))) ;Dd

Next 100,000 100,000

Next 100,000 100,000

yk !)),))) df

yk !)),))) df

Balance up to Rs. 25 lacs

Balance up to 25 lacs

? @% nfv ;Dd

? @% nfv ;Dd

Excess of Rs. 25 lacs

Excess of Rs. 25 lacs

Tax rates

1%** (SST) 15% 25%

35% ?= @%,)),))) eGbf a9L cfodf ?= @%,)),))) eGbf a9L cfodf (25%+25%*40%) ** a) 1% SST to be deducted only to the extent of employment e mployment income of a natural person having income from employment, business and investment and not to be deducted on the income in excess of such employment income.

/f]huf/L, h uf/L, Joj;fo jf nufgLaf6 ldl>t cfo x'g]g] k|fs[ fs[lts lts JolQmsf xsdf /f]huf/Laf6 h uf/Laf6 ePsf] cfosf] ;Ldf;Dd ! k|ltzt ltzt s/ nfUg] / /f]huf/L h uf/L cfo gePsf] cj:yfdf pQm ! k| ! k|ltzt ltzt s/ gnfUg] . 6 L kmd{ btf{ ePsf b) Not applicable for sole proprietorship business. Psnf}6L s/bftfsf] xsdf pk/f]Qm Q m adf]lhd l hd Ps k|ltzt ltzt s/ gnfUg] . c) 1% tax, also called Social Security Tax, should be deposited in a fh :j :j vftfdf hDdf ug'{ kg]{ . separate revenue account. c;'n ul/Psf] ! % /sd 5'§}§} / fh

b. Resident Female In case of resident female taxpayer having employment income only, rebate of 10% shall be allowed on the total tax liability.

s'g}g} afl;Gbf k|fs[ fs[lts lts JolQm kfl/>lds cfo dfq cfh{ g ug]{ dlxnf /x]5 eg] To:tf] k|fs[ fs[lts lts AolQmn] ltg'{ kg]{ s/ /sddf bz k|ltzt ltzt 5'6 x'g]g5 ] .

c. Non-resident individual The taxable income of a non-resident individual for an income-year is taxed at the rate of 25 percent u}/ afl;Gbf k|fs[ fs[lts lts JolQmsf] s'g}g} cfo jif{sf] s f] s/of]Uo U o cfodf klRr;

k|ltztsf ltztsf b/n] s/ nfUg] 5 . Banskota & Co., Chartered Accountants Tel: +977-1-4440935, e-mail: [email protected]


d. Concessional tax rates for natural person

Income from special business specified in sec 11.

bkmf !! df plNnlvt ljz] ifif pBf]u ;~rfnaf6 k|fKt fKt cfo . U o cfo . Income from export lgsf;Laf6 ePsf] s/of]Uo

20% slab rate instead of 25% 20%

e. Gains from disposal of Non-business Chargeable Assets

Land and building**

hUuf tyf lghL ejg -

If owned for more than 5 years

2.5%

:jfldTj % jif{ eGbf a9L ePsf] 5 eg] If owned for less than 5 years

jfldTj % jif{ eGbf sd /x]sf] s f] 5 eg] Gains of transaction in commodity future market Sdf]l86L l 86L ˆo'r/ r/ dfs]6df 6{ df ePsf] nfe Gains on disposal of listed securities

5% 10% 5%

lwtf]kq k q jf]8{ 8 { df df ;"lrs/0f l" rs/0f ePsf] lgsfosf] lxtsf] lg;u{af6 a f6 k|fKt fKt nfe Gains on disposal of non-listed securities

10%

lwtf]kq k q jf]8{ 8 {df d f ;"lrs/0f lrs/0f gePsf] lgsfosf] lxtsf] lg;u{af6 a f6 k|fKt fKt nfedf ** Private Land and building are deemed to be Non-business chargeable assets if it has been disposed for a sum of Rs. 30 lacs or less and in case of a private residence of an individual individual which has been owned by him continuously for 3 years or more or resided by him continuously or intermittently for 3 years or more.

hUuf tyf ejgsf] ;DaGwdf u}/ Jofj;flos s/of]Uo ;DklQ : s'g}g} k|fs[ fs[lts lts JolQmsf] cljlR5Gg tLg jif{ jf ;f] eGbf a9L cjlw :jfldTjdf /x] sf] sf] jf ;f] JolQmn] cljlR5Gg jf k6s k6s u/L s' n n tLgjif{ jf ;f] eGbf a9L a;f]af; u/]sf] s f] s'g}g} lghL ejg, jf Ps s/f]8 ?k}ofF eGbf sd d"Nodf lg;u{ u/]sf] s f] hUuf tyf lghL tyf lghL ejg .



f. Income from windfall gains Income from windfall gains means lottery, gift, prize, baksis, award for wining (jitauri) and other similar types of gains. Such incomes are taxed at the rate of 25% and are final withholding payments. payments.

cfsl:ds nfe zAbn] lr7\7f, 7f, pkxf/, k'/:sf/, /:sf/, alS;;, lhtf}/L / L tyf cGo s'g}g} klg cfsfl:ds ?kdf k|fKt fKt x'g]g] nfenfO{ hgfp+5 . o:tf] nfedf k|fKt fKt cfodf @% k|ltztsf ltztsf b/n] e'QmfgLsf] QmfgLsf] ;dodf s/ s§L ug'{ kb{ 5 / To:tf] /sd clGtd ?kdf s/ s§L x'g]g] e'QmfgL QmfgL dflgg] ePsf]n] n ] To:tf] /sd cfodf ;dfa]; ug'{ kb} g{ . g. Deductions i. Retirement contribution to an Approved Retirement fund

:jLs[t cjsfz sf]ifi f of]ubfg bfjL Retirement contribution to an Approved Retirement fund is allowed rd as a deduction subject to the limit of Rs. 300,000 or 1/3 of assessable income, whichever is lesser.

:jLs[t cjsfz sf]ifsf] i fsf] lxtflwsf/L k|fs[ fs[lts JolQmn] s'g} cfo jif{df d f ;f] sf] ifdf ifdf u/]sf] s f] cjsfz of]ubfg u bfg cfk\ mgf] s/of]Uo U o cfosf] u0fgf ubf{, cjsfz of]ubfg u bfg jf ?= # nfv jf cfkm\gf] gf] lgwf{/0fof] / 0fof] Uo Uo cfosf] Ps ltxfO{ df df h'g 36L x'G5 G5 ;f] bfjL ug{ ;Sg] 5 5 . . ii.

Donation : yfx?nfO{ lbOPsf] Donation given to exempt organisation s/ 5"6 kfPsf ;+:yfx?nfO{

rGbf pkxf/ Donation given to an approved tax-exempt organisation is deductible subject to a limit of Rs. 100,000 or 5% of adjustable g} JolQmn] s'g}g} cfo jif{df d f :jLs[lt lt taxable income, whichever is lower. s'g}

k|fKt fKt s/ 5"6 kfpg] ;+:yfnfO{ : yfnfO{ rGbfpkxf/ lbPsf] /sd jf Ps nfv ?k} ofF ofF jf ;f] JolQmsf] ;f] jif{sf] s f] ;dfof]lht l ht s/of]Uo U o cfosf] kfFr k|ltztdWo] ltztdWo] h'g 36L x'G5 ;f] /sd 36fO{ bfaL ug{ ;Sg] 5 5 .. ii.

Remote area allowance Location

Deductions Rs. (P.a)

If]q q

5'6sf] 6sf]

Area A Area B Area C Area D Area E

50,000 40,000 30,000 20,000 10,000



iii.

Foreign Allowance Deduction 75% of Foreign Allowances received by employees of diplomatic mission of Nepal shall be deduced from the total taxable income.

g]kfnsf k fnsf ljb]z l:yt s'6g} 6g}lts l ts lgof]udf sfo{/t / t sd{rf/Lsf] j}b]b ]lzs l zs eQfsf] krxQ/ k|ltzt ltzt /sd s/of]Uo U o cfoaf6 36fO{ af+sL s L /xg] /sddf dfq s/sf] u0fgf ul/g] 5 . iv.

Additional deduction for pensioners

A resident individual earning pension income is allowed additional deduction of 25% of Rs. 160,000 for individual and Rs. 200,000 for couple or such pension income, whichever is less.

lgj[lte/0f lte/0f cfo ePsf] afl;Gbf k|fs[ fs[lts lts JolQmsf] nflu ? !^),))) -Psn JolQmsf] xsdf_ jf ? @)),))) - bDklQ 5gf} 6 ug]{ k|fs[ fs[lts lts JolQmsf] xsdf_ sf] kRrL; k|ltzt ltzt jf lgj[lte/0f lte/0f cfo dWo] sd /sd cfoaf6 36fpg kfpg] 5g\ . v.

Deductions for resident differently-able persons

50% of the basic exemption limit (Rs. 160,000 for individual and Rs. 200,000 for couple) is allowed as deduction incase of resident differently-able persons.

s'g}g} afl;Gbf k|fs[ fs[lts lts JolQm ckfË /x] 5 eg] To:tf] k|fs[ fs[lts lts JolQmsf] nflu ? !^),))) !^),))) - Psn JolQmsf] xsdf_ jf ? @)),))) - bDklQ 5gf} 6 ug]{ k|fs[ fs[lts lts JolQmsf] xsdf_ sf] krf; k|ltzt ltzt yk /sd s/of]Uo U o cfoaf6 36fO{ jf+sL s L /xg] /sddf dfq s/sf] u0fgf ul/g] 5 . vi.

Life insurance premium A deduction of the amount paid by a resident natural person for life insurance or Rs. 20,000 whichever is less is allowed while

calculating taxable income.

s'g}g} afl;Gbf k|fs[ fs[lts lts JolQmn] nufgL aLdf u/]sf] s f] /x]5 eg] ;f] jfkt e'QmfgL QmfgL u/]sf] s f] jflif{s lk|ldod ldod jf jL; xhf/ ?k}ofF o fF df h'g 36L x'G5 G5 ;f] /sd s/of]Uo U o cfoaf6 36fO{ afFsL s L /xg] /sddf dfq s/sf] u0fgf ul/g] 5 .



h.

Tax credit a) Medical Tax Credit (med-claim) A resident individual can claim a tax credit of an amount incurred for medical expenses upto a limit of Rs. 750 or 15% of approved medical g} afl;Gbf k|fs[ fs[lts lts JolQmn] cf}iflw i flw pkrf/ afkt s/ expenses, whichever is lower. s'g}

ldnfgsf] /sd adf]lhd l hd :jLs[t cf}iflw i flw pkrf/ vr{ /sdsf] kGw| k|ltztsf] ltztsf] b/n] x'g] /sd jf ? &%) dWo] h'g 36L x'G5 G5 ;f] /sd 36fO{ bfaL ug{ ;Sg] 5 . b) Foreign tax Credit A resident person may claim foreign tax credit for any foreign income tax paid during a year.

s'g}g} afl;Gbf JolQmn] s'g}g} cfo jif{df d f bflvnf u/]sf] s f] s'g}g} ljb]zL z L cfos/ ;f] JolQmsf] lgwf{ /0fof] /0fof]Uo U o ljb]zL z L cfo afkt bflvnf ul/Psf] s/sf] xb;Dd ;f] cfo jif{df d f ;f] ljb]zL z L cfos/ afkt s/ ldnfgsf] bfaL ug{ ;Sg] 5 .



4. Presumptive taxation a. Small tax payers A resident individual whose income consists exclusively from business having source in Nepal and the income or turnover does not exceed Rs. 200,000 or Rs. 2,000,000, as the case may be, and he elects to apply this provision, provided he does not claim medical tax credit and credit for TDS withheld is taxable as follows: follows:

g]kfndf k fndf ;|f]ft] ePsf] Joj;foaf6 k|fKt fKt cfo dfq ePsf] Pj+ cf}ifwL i fwL pkrf/ vr{ / clu|d s/ s §L §L jfkt s/ ldnfg ug{ bfjL gu/]sf] s f] Pj+ Joj;foaf6 k|fKt fKt cfo ? @)),))) / Joj;fosf] sf/f]af/ a f/ ? @,))),))) eGbf a9L gePsf] JolStn] cfo jif{df d f of] Joj:yf nfu" x'g]g] u/L 5gf}6 u/]sf s f afl;Gbf k|fs[ fs[lts lts JolQmsf] xsdf lgDg adf]lhd l hd s/ nfUg] 5 : Location of Business

Tax Amount (Rs.)p.a

Metropolitan or Sub- Metropolitan Cities dxfgu/kflnsf jf pk — dxfgu/kflnsf If]q q — dxfgu/kflnsf q Municipalities gu/kflnsf If]q g} :yfgdf Other places cGo s'g}

3,500 2,000 1,200

b. Vehicle owners Owners of Vehicle plying vehicle on hire shall be taxed as follows: ef8fsf ;jf/L;fwg wgLx?af6 b]xfo x fo adf]lhdsf] l hdsf] jflif{s s/ c;'n ul/g] 5 : Type of vehicle

Tax Amount (Rs.)p.a

Mini-bus, Mini-truck, Truck and Bus

1,500

ldlga;, ldlg 6«s, s, 6«s / a; Car, Jeep, Van, Micro-bus

1,200

sf/, lhk, Eofg, dfOqmf] a; Three-wheeler, Auto-rickshaw, Tempo

850

ly| lx\jn/, jn/, c6f] l/S;f, 6] Dkf] Dkf] Tractor, Power Tiller

750

6« ]S6/ S 6/ / kfj/ l6n/



5. Entities a. Rate of tax for entities

S. No 1.

Type of business

Tax rates

lgsfosf] laa/0f

s/sf] b/

General Business entities.

25%

;fdfGo Joj;fo ug]{ lgsfo . 2.

Entities involved in producing Tobacco and Alcohol related products.

30%

;"lt{ lt{hGo h Go / dlb/fhGo pBf]u ;+ rfng rfng ug]{ lgsfo . 3.

Banking and Financial Institutions, and Insurance companies

30%

a}s, + , lalQo ;+ :yf, s :yf, jLdf Joj;fo ug]{ lgsfo . 4.

Entity engaged in petroleum business.

30%

k]6«6 «f]flnod l] nod sfo{ ug]{ lgsfo . 5.

Special industries.

20%

ljz]ifi f pBf]u ;+rfng ug]{ lgsfo . 6.

Entities engaged in operating any road, bridge, tunnel, rope- 20% way, or fly-overs constructed by the entity or engaged in operation of trolley bus and trams. ;8s, k'n, n, 6g]n, n , /f]k k – j ] jf cfsfz] k'n lgdf{0f 0 f u/L ;~rfng ug]{ lgsfo, jf 6«nL nL –j]

a; jf 6«fd fd ;~rfng ug]{ lgsfo . 7.

Entities engaged in Co-operative business, other than tax exempt cooperatives.

20%

s/ 5'6 afx]ssf s sf ;xsf/L ;+:yf : yf ;+rfng ug]{ lgsfo . 8.

Income derived by an entity from export having a source in Nepal.

20%

g]kfnsf] k fnsf] ;|f]ftaf6 t] af6 lgsf;L u/L cfo k|fKt fKt ug]{ lgsfo . 9.

Entity wholly engaged in building public infrastructure, and owning, operating and transferring (BOOT) it to the Government of Nepal.

20%

;fj{hlgs h lgs k'jf{ jf{wf/ w f/ ;+/rgfsf] / rgfsf] lgdf{0f 0 f tyf ;+rfng r fng u/L g]kfn k fn ;/sf/nfO{ x:tfGt/0f ug]{ cfof]hgf h gf . 10.

Entities engaged in generation, transmission, or distribution of electricity.

20%

laB't u[x lgdf{0f, 0 f, pTkfbg / k|;f/0f ;f/0f u/]df d f To:tf] lgsfo . 11.

Estate of a deceased resident individual or trust of an incapacitated incapacitated resident individual.

Same rate of tax as was s'g}g} d[t afl;Gbf JolQmsf] ;DklQ k|ffKt Kt ug]{ jf /]vb] v b] v ug]{ jf czQm afl;Gbf applicable k|fs[ fs[lts lts JolQmsf] 6i6« « . to the



deceased or incapacitat ed individual.

b. Concessional Rates of Tax

S. No 1.

Type of business

Tax rates

lgsfosf] laa/0f

s/sf] b/

Agricultural income derived from sources in Nepal other than NIL the income from an agriculture business derived by a registered firm, or company, or partnership, or a corporate body, or through the land holding above the ceiling as prescribed in the the Land Act, 2021.

s'g}g} kmd{ , sDkgL, ;fem]bf/L b f/L k{ md tyf ;+ul7t u l7t ;+:yfsf] : yfsf] ?kdf btf{ u/L s[lif lif Joj;fo u/L k|fKt fKt u/]sf] s f] cfodf / e"ld;DaGwL ld;DaGwL P] g, g, @)@! sf] bkmf !@ sf] v08 - 3_ / -ª_ df pNn] v eP adf]lhdsf] l hdsf] hUufdf s[lif lif Joj;fojf6 k|fKt fKt ePsf] afx]s s cGo s[lif lif cfDbfgL . 2.

Incomes derived by cooperative societies, registered under NIL Cooperative Act, 2048 (1991), from business mainly based on agriculture and forest products such as sericulture and silk production, horticulture horticulture and fruit processing, processing, animal husbandry, diary industries, poultry poultry farming, farmin g, fishery, tea gardening and processing, coffee farming and a nd processing, herbiculture and herb processing, vegetable seeds farming, far ming, bee-keeping, honey honey production, rubber rubber farming, floriculture and production and forestry related business such as leasehold forestry, agro-forestry, cold storage established for the storage of vegetables and business of agricultural seeds, insecticide, fertilizer and agricultural tools (other than machine operated)and rural community based saving & credit cooperatives and Dividends distributed by such societies.

;xsf/L P]g, g , @)$* adf] lhd lhd btf{ eO{ ;+rfng ePsf] s[lif lif jf jg k}bfjf/df b fjf/df cfwfl/t /]zd z d v]tL t L tyf /]zd z d pTkfbg, kmnkm"n v]tL t L pTkfbg tyf kmnkm"n n k|zf] zf]wg, w g, kz'kfng, kfng, 8]/L / L pBf]u, s'v' v'/fkfng, /fkfng, dT:okfng, lrof v] tL tL tyf k|zf] zf]wg, w g, skmL v]tL t L tyf k|zf] zf]wg, w g, hl8j'6L 6L v]tL t L tyf k|zf] zf]wg, w g, t/sf/Lsf jLp ljhg pTkfbg, df}/Lkfng, / Lkfng, dx pTkfbg, /a/ v]tL, sj'lnolt lnolt jg, Pu|f]fkm/] k] m/]i6« L cflb Banskota & Co., Chartered Accountants Tel: +977-1-4440935, e-mail: [email protected]


Joj;flos jg ;DaGwL Joj;fox? h:tf s[lif lif tyf jghGo pBf] ux?, ux?, t/sf/L e08f/sf nflu :yflkt zLt e08f/, s[lif;DaGwL lif;DaGwL jLp ljhg, kz' cfxf/f, bfgf, sL6gfzs cf}iflw, i flw, dn tyf s[lif lif cf}hf/ -oflGqs zlQmaf6 rNg]afx] s_ s_ sf] sf/f]jf/ j f/ ug]{ ;xsf/L ;+:yf : yf tyf u|fdL0f fdL0f ;d'bfodf bfodf cfwfl/t art tyf C0f ;xsf/L ;+:yf : yf jf ;+3sf] 3 sf] cfo s/ gnfUg] . 3.

Special industries providing direct employment to following number of Nepali citizens during each day of the year: year : jif{ el/ lgDg ;+Vofdf g]kfnL kfnL gful/snfO{ k|ToIf ToIf /f]huf/L huf/L lbg] laz]ifif pBf]u : 300 or more #)) jf ;f] eGbf j9L 





18% 16%

1200 or more !@)) jf ;f] eGbf j9L

100 or more (including 33% women, dalits and differently-able persons) !)) jf ;f] eGbf j9L -;f] dWo] 16%

sDtLdf ##Ü dlxnf, blnt / ckfË_ 4.

Information technology companies providing direct employment to six hundred or more Nepali citizens during each day of the year:

jif{ el/ lgDg ;+Vofdf Vofdf g]kfnL kfnL gful/snfO{ k|ToIf ToIf /f]huf/L huf/L lbg] ;'rgf rgf k|lawL lawL pBf]u: 300 or more #)) jf ;f] eGbf j9L 22.5% 





1200 or more !@)) jf ;f] eGbf j9L

20%

100 or more (including 33% women, dalits and 20% differently-able persons) !)) jf ;f] eGbf j9L -;f] dWo]

sDtLdf ##Ü dlxnf, blnt / ckfË_ 5.

Special industries operating in a remote area.

2% for 10 years

clt cljslzt If] qdf qdf ;+rfng r fng x'g]g] ljz]ifi f pBf]u . 6.

Special industries operating in an undeveloped area.

cljsl;tIf]qdf q df ;+rfng r fng x'g] ljz]ifi f pBf]u . 7.

Special industries operating in an underdeveloped underdeveloped area.

cNkljsl;t If]qdf q df ;+rfng r fng x'g]g] ljz]ifi f pBf]u . 8.

4% for 10 years 6% for 10 years

Industries established in special economic zones of 0% Mountainous districts and specified Hilly districts (industries first


for 10


specified in sec.3 of Industrial Enterprises Act, 1992).

years, and lxdfnL lhNnf / g]kkfn fn ;/sf/n] tf]s] s sf] s ] f] kxf8L lhNnfsf laz]ifi f cfly{s If]qqdf df 10% :yflkt pBf]u -cf}Bf] B f]lus l us Joj;fo P] g, g, @)$( sf] bkmf # df pNn] lvt lvt pBf]u_ u _ . thereafter 9.

Special economic zones in other areas (industries specified in 0% for sec.3 of Industrial Enterprises Act, 1992). first 5 cGo If] qsf qsf laz]ifi f cfly{s If]qdf q df :yflkt pBf]u -cf}Bf] B f]lus l us Joj;fo P] g, g, @)$( years, and sf] bkmf # df pNn] lvt lvt pBf]u_ u _ . 10% thereafter

10.

Entities engaged in the exploration and extraction of 0% for petroleum and natural natural gas and operating before Chaitra 2075. first 7 @)&% r}q;Dd q ;Dd Jofkfl/s sf/f]jf/ j f/ ;+rfng r fng ug]{ k]6«6 «f]flnod l] nod tyf k|fs[ fs[lts lts Uof; years, and cGj]z0f z 0f tyf pTvgg ug]{ pBf]u . 50% rebate for the next 3 years

11.

Entities engaged in software development, data processing, cyber café, digital mapping business in the Information Technology parks established by Government of Nepal by publication publication in the Official Gazette Gazette .

12.5%

g]kfn k fn ;/sf/n] g]kfn k fn /fhkqdf ;"rgf rgf k|sfzg sfzg u/L tf]s]sf] 6]Sgf] S gf]nf] n f]hL h L kfs{ , afof] 6]s kfs{ / ;"rgf rgf k|ljlw ljlw kfs{ leq ;km\6j] 6j]o/ o / ljsf;, tYof+s k|zf] zf]wg, w g, ;fOj/ Sofkm] , l8lh6n Doflk+ u ;DalGw pBf]u . 12.a

Entities engaged in production, or production and transmission ,or production and transmission ,or production, transmission and distribution of electricity, which commercially start production, transmission, or distribution of electricity before Chaitra 2075. (including solar, wind and bio gas energy). energy).

0% for first 7 years, and 50% rebate for the next 3 ljB'tsf] tsf] pTkfbg, k|; ;f/0f, f/0f, ljt/0f ug]{ cg'd dlt lt k|ffKt Kt JolQmn] ;Dat\ @)&% r}qq years

dlxgf;Dd Jofkfl/s ?kdf hnljB'tsf] tsf] pTkfbg, pTkfbg / k|;f/0f, ;f/0f, pTkfbg / ljt/0f jf pTkfbg, k|;f/0f ;f/0f / ljt/0f z'? u/]df d f -;f}o{o ,{ jfo' j fo' tyf h}ljs l js kbfy{af6 pTkfbg x'g]g] ljB't ;d]t_ t _ . 12.b

Entities commencing their work within Bhadra 7, 2071 and producing electricity electricity by Chaitra Chaitra 2075.

0% for first 10 years, and ;Dat\ @)&! ;fn efb| & ut] leq lgdf{00f f k|ff/De /De ug]{ hnljB't cfof]h hgfn] gfn] 50%

;Dat\ @)&% ;fn r}q dlxgf;Dd Jofkfl/s ?kdf hnljB'tsf] tsf] pTkfbg ;'? Banskota & Co., Chartered Accountants Tel: +977-1-4440935, e-mail: [email protected]


u/]sf s f pBf]u .

12.c

rebate for the next 5 years Entities that obtained license before 2058/12/19 2058/12/19 and 0% for 15 generating power by Ashad 2066. years from @)%*÷!@÷!( cl3 cg'dltkq dltkq k|fKt fKt ePsf] tyf @)^^ cfiff9 d;fGt leq COD

pTkfbg sfo{ ;'? u/]sf s f pBf]u .

12.d

12.e

12.f

Entities generating electricity after Ashad 2066 but before Chaitra 2075, whenever the license may may be obtained.

0% for first 7 years from cg'dltkq dltkq hlxn] kfP klg, @)^^ cfiff9 d;fGt kl5 t/ @)&% r} q d;fGt cl3 COD, pTkfbg sfo{ ;'? u/]sf s f pBf]u . 50% rebate for the next 3 years Entities that obtained license after 2058/12/19 and generating 0% for power after Ashad 2066 2066 but before Chaitra Chaitra 2075. first 7 years of @)%*÷!@÷!( cl3 cg'dltkq dltkq k|fKt fKt ePsf] tyf @)^^ cfiff9 d;fGt leq COD, pTkfbg sfo{ ;'? u/]sf s f pBf]u . 50% rebate for the next 3 years Entities that obtained license after 2058/12/19 and generating No power before Ashad 2066. concession

@)%*÷!@÷!( kl5 cg'dltkq dltkq k|fKt fKt ePsf], @)^^ cfiff9 d;fGt leq pTkfbg sfo{ ;'? u/]sf s f pBf]u . 13.

Income from export manufacturing industry.

of

goods

manufactured

by

a 25% Rebate

pTkfbgd'ns ns pBf]un] u n] pTkfbg u/]sf] s f] j:t' lgof{t u/]df d f k|fKt cfodf . 14.

Entities involved in building and operation operat ion of roads, bridges, airports, and tunnel ways.

40% Rebate

;8s, k'n, n, jLdfg:yn, ;'?u+ dfu{ lgdf{0f 0 f / ;+rfng r fng u/]df d f ;f]af6 a f6 k|fKt fKt cfodf . 15.

Income earned by an entity on investing and operation of 40% trams and trolley bus. Rebate

6«fd, fd, 6«nLj;df nLj;df nufgL u/L ;+rfng r fng u/]df d f ;f]af6 k|fKt fKt cfodf . 16.

Listed entities engaged in manufacturing sector, tourism sector and generation, transmission and distribution


10% Rebate


hydroelectricity and entities specified in sec 11(3d).

lwtf]kq k q ahf/df ;"lrs[ lrs[t ePsf pTkfbgd'ns, ns, ko{6g 6 g ;]jf, j f, hnljB't pTkfbg, ljt/0f tyf 6«fG;ld;g fG;ld;g ug]{ / bkmf !! sf] -#u_ df pNn]v ePsf lgsfo . 17.

Entities established in remote areas and engaged in production of brandy, brandy, cider and wine from fruits. fruits.

40% Rebate for the first 10 clt cljsl;t If] qdf qdf :yflkt kmnk"mndf cfwfl/t a|f08L, f08L, ;fO8/ Pjd\ jfOg years of pTkfbg ug]{ pBf]u . start of business Royalty earned on export of Intellectual properties. 18.75%

18.

s'g}g} JolQmn] af}l4s l 4s ;DklQ lgof{t jfkt k|fKt fKt /f]oN6L o N6L cfodf . 19.

Income earned by sale of intellectual properties.

12.5%

s'g}g} JolQmn] jf}l4s l 4s ;DklQsf] x:tfGt/0fåf/f ljqmL u/L k|fKt fKt u/]sf] s f] cfodf . 20.

Repatriation of income of a foreign permanent establishment of a non-resident person situated in Nepal.

5%

s'g}g} u}/ afl;Gbf JolQmsf] g]kfnl:yt k fnl:yt ljb]zL z L :yfoL ;+:yfkgn] : yfkgn] ljb]z k7fPsf] cfodf . 21.

Non-residents Providing Shipping, Air Transportation or 5% Telecommunications Telecommunications Services within Nepal.

g]kfn k fn clw/fHoaf6 csf]{ ljb]zL z L d'n' n'sdf sdf k'Ug] Ug] u/L k|:yfg :yfg gx'g g ] hn ofqf, xjfO{ oftfoft jf b"/;+ /;+rf/ ;]jf j f pknAw u/fpg] u}/ afl;Gbfsf] s/of]Uo U o cfodf . 22.

Non-residents Providing Shipping, Air Transportation or 2% Telecommunications Telecommunications Services outside of Nepal.

g]kfn k fn clw/fHoaf6 csf]{ ljb]zL z L d'n' n'sdf sdf k'Ug] Ug] u/L k|:yfg :yfg x'g]g] hn oftfoft, xjfO{oftfoft o ftfoft jf b"/;+ /;+rf/ r f/ ;]jf pknJw u/fpg] u}/ jfl;Gbf JolQmsf] xsdf .

-

c. Deductions for business General Deductions ;fdfGo s6[ L Interest Jofh H bftsf] nfutsf] vr{ Cost of Trading Stock Jofkf/ df}Hbftsf] tyf ;'wf/ wf/ vr{ Repair and Improvement Costs dd{t b"if0f if0f lgoGq0f vr{ Pollution Control Costs k|b" ;Gwfg / ljsf; vr{ Research and Development Costs cg';Gwfg f;s6[ L vr{ Depreciation Allowances x|f;s6[ S ;fgL Losses from a Business or Investment Joj;fo jf nufgLaf6 gf]S;fgL



d. Depreciation Rates Pool A

Details Buildings, structures, and similar works of a permanent nature

Rate 5%

ejg, :6«Sr/ Sr/ / :yfoL k|s[ sltsf l[ tsf o:t} k|sf/sf sf/sf cGo agf} 6x? 6x? B

Computers, data handling equipment, fixtures, office furniture, and office equipment

25%

sDKo"6/, 6/, tYofÍ s] nfpg] nfpg] pks/0f, kmlg{r/, r /, lkmS:r/ / sfof{no n o pks/0fx? C

Automobiles, buses, and minibuses

20%

c6f]df] d f]afON;, a fON;, a; tyf ldgLa;x? D

Construction and earth-moving equipment, unabsorbed pollution control cost and research and development cost and any depreciable asset not included in another class class of assets

15%

lgdf{0f 0 f tyf pTvgg\ ;DaGwL pks/0fx? / s6[ L gePsf] k|b" b"if0f if0f lgoGq0f vr{ / cg';Gwfg ;Gwfg / ljsf; vr{ / cGo st} ;dfj]z gEfPsf x|f; of]Uo U o ;DklQx? E

Intangible Intangible assets other than depreciable assets included included in Class "D"

**

ju{ æ3Æ df pNn]v ePsf x|f;of] f;of]Uo U o ;DklQx? afx] ssf ssf cb[Zo Zo ;DklQx? ** rate in percentage calculated as the cost of assets divided by the useful life of the asset in the pool most recently acquired by the person and rounded down to the nearest half year.

;DklQ vl/b ubf{ sf] sf] avtdf pQm ;DklQsf] nfutnfO{ ;DklQsf] k|of] of]ufjlwn] u fjlwn] efu u/L lgs6td cfwf jif{df d f ldnfg u/L x'g cfpg] b/ k|ltztdf ltztdf .



6. Double Tax Avoidance Agreements (tax rates) S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Country India Norway Thailand Srilanka Mauritius Austria Pakistan China South Korea Qatar

Dividend tax 10%, 15% 5%, 10%, 15% 15% 15% 5%, 10%, 15% 5%, 10%, 15% 10%, 15% 10% 5%, 10%, 15% 10%

Tax on Interest 10%, 15% 10%, 15% 10%, 15% 10%, 15% 10%, 15% 10%, 15% 10%, 15% 10% 10% 10%

Royalty tax Not more than Not more than Not more than Not more than Not more than Not more than Not more than Not more than Not more than Not more than

15% 15% 15% 15% 15% 15% 15% 15% 15% 15%

7. TDS provisions a. TDS on employment An employer shall deduct TDS on the amount payable to the employees after allowing reduction of medical tax credit, if any. Such TDS shall be withheld on a monthly basis as is equal to the annual tax liability divided by 12.

s'g}g} /f]huf/bftfn] h uf/bftfn] sd{rf/Lx?n] r f/Lx?n] cf}ifwL i fwL pkrf/ jfkt s/ ldnfg ug{ kfpg] eP To;nfO{ ldnfg u/L] , aflif{s kfl/>ldsdf nfUg] s/sf] bfdf;fxLsf] lx;fjn] dfl;s ?kdf clu|d s/ s§L ug'{ kg]{ .

b. Tds rates S.No. Details of payment

TDS Rate

Final or not

1.

15%

Non final

Payment for natural resources, royalty, service 15% fees, sales bonus.

Non final

Interest having source in Nepal.

;fdfGo Aofh e'QmfgL QmfgL . 2.

k|fs[ fs[lts lts >f]t, t , /f]oN6L, ;]jf j f z'Ns, Ns, sldzg jf ljqmL jf]g; g ; cflb . 3.

Meeting allowance, allowance.

part

time


teaching 15%

Final


j}7s 7 s eQf, k6s] ?kdf ul/Psf] cWofkg u/fP afktsf] e'QmfgL 4.

Payment from approved retirement fund 5% exceeding the higher of 50% of retirement fund or Rs.500,000.

Final

g]kfn k fn ;/sf/ jf :jLs[t cjsfz sf]ifaf6 i faf6 ePsf] cjsfz e'QmfgLaf6 QmfgLaf6 ?= %,)),))) jf %)k|ltzt ltzt dWo] h'g a9L x'G5 G5 ;f] 36fO{ afFsL s L /xg] e'QmfgL QmfgL . 5.

Payment of commission by resident employer 5% company to a non resident. res ident.

Final

jfl;Gbf /f]huf/ h uf/ sDkgLn] u}/ jfl;Gbf JolQmnfO{ e'QmfgL QmfgL u/]sf] s f] sldzg . 6.

Payment relating to lease of airplane.

10%

Non final

Service fee to service provider registered in 1.5% VAT.

Non-final

jfo'ofgsf] ofgsf] lnh -k§f_ jfktsf] /sd e'QmfgL QmfgL . 7.

d"No No clej[l4 l4 s/df btf{ ePsf] ;]jfk| j fk|bfos bfos jfl;Gbf JolQmnfO{ e'QmfgL QmfgL u/]sf] s f] ;]jf j f z'Ns . 8.

Payment of rent relating to land and building, 10% including furnishing and fittings, to natural person not relating to business.

Final

k|fs[ fs[lts lts AoQmLsf] Joj;fo;+u ;DjlGwt gePsf] 3/ hUuf jxfndf nufP jfktsf] ef8f / 3/df df}h' h 'bf bf /x]sf s f ;hfj6sf ;fdfgsf] Psd'i6 i6 ef8f . 9.

Payment of rent having a source in Nepal to others.

10%

Non-final

5%

Final

5%

Final

5%

Final

Interest, not relating to business, paid to natural 5% person by resident bank, financial institution, institution, institutions issuing debentures, or listed companies on deposits, debentures and government bonds.

Final

g]kfndf k fndf ;|f]ft] ePsf] ef8f -cGo_ 10.

Dividend

nfef+z z 11.

Gain from investment insurance

nufgL jLdfsf] nfe 12.

Gain from unapproved insurance

:jLs[lt lt glnPsf] cjsfz sf]ifaf6 i faf6 nfesf] e'QmfgL QmfgL 13.

g]kfndf k fndf ;|f]ft] ePsf] / Joj;fo ;~rfng;+u ;DalGwt gePsf] v08df afl;Gbf a} s, + , ljQLo ;+:yf s : yf jf C0fkq hf/L ug] { cGo s'g}g} lgsfo jf k|rlnt sfg"g adf]lhd l hd ;"lrs[ lrs[t ePsf sDkgLn] s'g}g} k|fs[ fs[lts lts JolQmnfO{ lgIf]k, k , C0fkq, l8j] Gr/ Gr/ tyf Banskota & Co., Chartered Accountants Tel: +977-1-4440935, e-mail: [email protected]


;/sf/L j08sf] afkt e'Qmfg Qmfg ug]{ Aofh . 14.

Income from windfall gains.

25%

Final

1.5%

Non-final

15%

Final

cfsl:ds nfe 15.

Contractual payment exceeding Rs. 50,000.

s/f/ jf 7]Ssf S sf jfkt ?= %),))) eGbf j9L /sdsf] e'QmfgL QmfgL . 16.

Contractual payment made to Nonresident.

u}/ jfl;Gbf JolQmnfO{ e'QmfgL QmfgL x'g]g] ;]jf j f ;DaGwL 7] Ssf Ssf jf s/f/df . 17.

Repair and other contracts of airplane made to 5% Non-resident.

Final

u}/ jfl;Gbf JolQmnfO{ e'QmfgL QmfgL x'g]g] jfo'ofg ofg dd{t tyf cGo 7]Ssf S sf jf s/f/df . 18.

Other payment made to non residents. reside nts.

As per the Final direction of the department

u}/ jfl;Gbf JolQmnfO{ x'g]g] cGo e'QmfgLdf QmfgLdf .

c. TDS

on

disposal

of

shares,

land

and

S.No.

Details of payment

1.

Gain on transaction in commodity future market 10% Sdf]l86L l 86L ˆo'r/ r/ dfs]6df 6{ df ePsf] nfe Gain on disposal of listed security of a resident entity:

2.

buildings

TDS Rate

etc

Final or not Non-final

lwtf]kq k q jf]8{ 8 {df d f ;"lrs/0f lrs/0f ePsf] lgsfosf] lxtsf] lg;u{af6 a f6 k|fKt fKt nfe -received by natural persons

k|fks fks jfl;Gbf k|fs[ fs[ltsJolQmsf] ltsJolQmsf] xsdf - received by others

cGosf] xsdf 3.

5%

Final

10%

Non-final

Gains from disposal of not listed securities

lwtf]kq k q jf]8{ 8 {df d f ;"lrs/0f lrs/0f gePsf] lgsfosf] lxtsf] lg;u{af6 a f6 k|fKt fKt nfedf fks jfl;Gbf k|fs[lts lts 10% -received by natural persons k|fks JolQmsf] xsdf


Final


- received by others

cGosf] xsdf 4.

15%

Non- final

2.5%

Final

5%

Final

Capital gains on disposal of land and/ or building by a natural person

s'g}g} k|fs[ fs[lts lts JolQmsf] 3/ tyf 3/hUuf lg;u{ jfkt ePsf] k"hLut + Lut nfedf h -

If Ownership of 5 years or more :jfldTj %

jif{ eGbf a9L ePsf] 5 eg] -

If ownership is less than 5 years :jfldTj %

jif{ eGbf sd /x]sf] s f] 5 eg]

d. Payments -

for

which

TDS

not

required

to

be

deducted

Payments made by an individual other than in conducting a business, or payment of rent re nt for the lease of a building, including goods and equipments therein.

k|fs[ fs[lts lts JolQmn] u/]sf] s f] Joj;fo ;+rfng;+ r fng;+u ;DalGwt e'QmfgL jf 3/, hUuf / ;f] ;+ ;+u h8Lt ;fdfg tyf pks/0f ef8fdf lnP afkt lt/] sf] sf] ef8f afx]ssf s sf cGo s'g}g} e'QmfgL . QmfgL . -

Payment made to person contributing articles in a newspapers and magazines

kqklqsfdf k|sflzt sflzt n]v /rgf jfktsf] e'QmfgL QmfgL . -

Payment made for preparation of question paper or checking of answer sheets.

k|Zgkq Zgkq tof/ u/] jf pQ/ k'l:tsf l:tsf hf+r u/] jfktsf] e'QmfgL QmfgL . -

Interest paid to resident res ident banks or resident res ident financial institutions. institutions.

afl;Gbf a}s + jf c? afl;Gbf ljQLo ;+ :yfnfO{ :yfnfO{ lt/]sf] s f] Jofh Jofh . . -

Payment of tax exempt income.

s/ 5"6 kfPsf] e'QmfgL QmfgL . -

Inter-regional interchange fee payment to banks issuing Credit Cards.

qm]l86 l 86 sf8{ hf/L ug]{ j}snfO{ + nfO{ lt/]sf] s s f] O06/l/hgn O06/r]Gh G h z'Ns Ns . Banskota & Co., Chartered Accountants Tel: +977-1-4440935, e-mail: [email protected]


Interest and fees payable by Government of Nepal to a Foreign Government or an International organization as per a bilateral agreement.

-

g]kfn k fn ;/sf/ / ljb]zL z L ;/sf/ jf g]kfn k fn ;/sf/ kIf ePsf] cGt/fli6«o ;+ :yf :yf jLr ePsf] s'g}g} ;Demf}tf t f adf]lhd l hd g]kfn k fn ;/sf/n] ljb]zL z L ;/sf/ jf cGt/fli6«o ;+ :yfnfO{ :yfnfO{ e'Qmfg Qmfg u/]sf] s f] Aofh jf z'Ns Ns . Interest upto Rs. 10,000 p.a. made by micro finance, cooperatives etc, based in a rural community.

-

u|fdL0f fdL0f ;d'bfodf bfodf cfwfl/t n3" ljQ ;+:yf, : yf, u|fdL0f fdL0f ljsf; a}s, + , x'nfs s nfs art a} s + / P]gsf] g sf] bkmf !!-@_ adf]lhd l hd ;xsf/Ldf hDdf u/]sf] s f] lgIf]kaf6 k af6 cflh{ t jflif{s bz xhf/ ?k} ofF ofF;Ddsf] ; Ddsf] Aofh e'QmfgL QmfgL . Re-insurance premium paid to Non-resident Non-res ident insurance company.

-

u}/ jfl;Gbf JolQmnfO{ e'QmfgL QmfgL x'g]g] k"gla{ gla{df d f lk|ldod ldod .

e. 

Deposition of TDS

Details of TDS to be filed and the sum deposited in the designated bank th accounts within 25 day of the next Nepali month

clu|d s/ s§L ug'{ kg]{ k|To]s JolQmn] k|To]s dlxgf ;dfKt ePsf] @% lbg leq, laa/0f bflvnf ug' { kg]{ / s/ s§L ul/Psf] /sd laefudf jf /fh:j vftf ;+rfng x'g] a}sdf + df bflvnf ug'{ kg].{. s 

The deductor and decductee jointly and severally liable for deposition of TDS, if TDS not deducted or or if the deducted deducted TDS is not deposited deposited in the prescribed manner.

s/ s§L gu/]df d f jf s/ s§L u/]sf] s f] dflgg] /sd ljefudf bflvnf gu/]df d f clu|d s/ s§L x'g]g] JolQm / ;f] clu|d s/ s§L ug]{ JolQm b'j} hgf ;+o'o 'Qm Qm ?kdf / 5"§f5"§}§} ?kdf ;f] s/ /sd ljefudf bflvnf ug{ lhDd] jf/ jf/ x'g]g] . f. Distribution of TDS certificate In case of TDS on 30 days after the end of the year or, where employment the employee has ceased employm e mployment ent with the withholding agent during the year, no /f]hu/L h u/L cfodf s/ s§L more than 30 days from the date on which ;DaGwdf the employment ceased .

jif{ ;dfKt ePsf] ldltn] tL; lbgleq pknAw u/fO{ ;Sg'kg] kg]5 { jf ;f] jif{df d f ;f] sd{rf/Ln] r f/Ln] ;f] clu|d s/ s§L ug]{ JolQmsf]df d f /f]huf/L h uf/L ug{ 5f]8] 8 ]sf] s f] eP ;f] /f]huf/L h uf/L 5f]8] 8 ] sf] sf] ldltn] tL; lbgleq ;f] k|df0fkq df0fkq pknAw u/fpg' Banskota & Co., Chartered Accountants Tel: +977-1-4440935, e-mail: [email protected]


kg]5 { . TDS deduction in other A withholding certificate shall be cases delivered within 15 days after the end of cGo s/ s§Lsf] xsdf the month specifying the period for which tax is withheld.

clu|d s/ s§L u/]sf] s f] cjlw v'nfO{ nfO{ clu|d s/ s§L u/]sf] s f] dlxgf ;dfKt ePsf] ldltn] kGw| lbgleq clu|d s/ s§L k|df0fkq df0fkq k|bfg bfg ug'{ kg]5 { .

8. Due date for Returns of income Tax return to be filed not later than 3 months (Ashoj) after the end of each income year, which can be extended further upto 3 months (Poush) by submitting a written request to the department

cfo jif{ ;dfKt ePsf] tLg dlxgf -c;f]h ;Dd_ leqdf ljefun] tf]s] s sf] s ] f] :yfgdf cfo ljj/0f bflvnf ug{ ' kg{ ]5 . tLg dxLgf;Dd Dofb yk ug{ ;Sg]5 . ljefu ;dIf yk Dofbsf] nflu lnlvt lgj]bg b g lbPdf ljefun] cfoljj/0f bflvnf ug'{ kg]{ Dofb # dlxgf -rf}q ;Dd_ yk ul/lbg ;Sg] 5 .

9. Due dates amount to be deposited while filing estimated tax

Installment Due Date st

1

By the end of Poush

kf}ifi f dlxgfsf] cGTo;Dd nd

2

By the end of Chaitra

r}q dlxgfsf] cGTo;Dd rd

3

By the end of Ashad

cfiff9 dlxgfsf] cGTo;Dd

Amount

40% of the estimated tax. cg'dflgt dflgt s/sf] $) % /sd 70% of the estimated tax. cg'dflgt dflgt s/sf] &) % /sd 100% of the estimated tax. cg'dflgt dflgt s/sf] !)) % /sd

Where the amount of total installments to be paid is less than Rs 5,000, estimated tax installments need not be paid.

a'emfpg' emfpg' kg]{ ;du| ls:tfsf] hDdf /sd kfFr xhf/ ?k}ofF o fF eGbf sd ePdf To:tf] ls:tfsf] /sd a'emfpg' emfpg' kg]{ 5}g .



10. Interest and Penalties

Failure to file Statements of Rs. 2,000 per statement estimated tax

lt ljj/0f b'O{O{ xhf/ ?k}of of s'g}g} cfo jif{sf] s f] cg'dflgt dflgt cfo ljj/0f k|lt bflvnf gu/] ]df d f

For Small tax payers ;fgf s/ bftfsf] xsdf s'gg}} cfo jif{s sf] f] cfo ljj/0f bflvnf Rs. 100 per month Ps ;o ?k} ofF ofF k|lt lt dlxgf Failure to file Return of Income

gu/] ]df d f

For other tax payers cGo s/bftfsf] xsdf 0.1% p.a of assessable income without allowing for any deductions or Rs. 100 per month, whichever is higher

s'g}g} /sd gs6fO{ / s'g} /sd ;dfj]z ug'{ kg] { eP ;f] ;dfj]z u/L x'g]g] lgwf{/0fof] / 0fof]Uo U o cfosf] /sdsf] ;"Go Go bzdna Ps k|ltzt ltzt k|lt lt jif{sf s f b/n] x'g]g] /sd jf Ps ;o ?k}ofF o fF k|lt lt dlxgfsf b/n] x'g]g] /sddWo] h'g a9L x'G5 ;f] /sd . Failure to maintain required 0.1% of assessable income without allowing documents for any deductions or Rs. 1,000 whichever is s'g}g} JolQmn] s'g}g} cfo jif{ /fVg' kg]{ higher.

sfuhft g/fv]df d f

s'g}g} /sd gs6fO{ lgwf{/0fof] Uo Uo cfosf] z"Go bzdnj Ps k|ltztn] ltztn] x'g]g] /sd jf Ps xhf/ ?k}ofF o fF dWo] h'g a9L x'G5 ;f] /sd .

Withholding agent who fails to file a statement s tatement

1.5% p.a of the tax required to be withheld for every month or part thereof during which the failure persists.

clu|d s/ s§L ug]{ s'g}g} Ph]06n] 0 6n] ljj/0f k|To] To]s dlxgf / dlxgfsf] efusf] nflu clu|d s/ s§L ug'{ k]z gu/]df d f kg]{ s/ /sdsf] jflif{s 8] 9 k|ltztsf ltztsf b/n] x'g] /sd . Interest for Understating 15% p.a on the shortfall in the payment of Estimated Installment estimated tax installments

ls:tfaGbLdf bflvnf ug] n] { ] sd cg'dflgt n dflgt ls:tfaGbLdf s/ a'emfpg' emfpg' kg]{ /sd sd a'emfPdf emfPdf ;f] sd s/ x'g]g] u/L a'emfPdf emfPdf nfUg] Jofh a'emfPsf] emfPsf] /sdsf] jflif{s !% % k|ltztsf ltztsf b/n] x'g]g] /sd . Interest for Failure to Pay Tax

s/ ga'emfPdf emfPdf Jofh nfUg]

15% p.a of the outstanding amount for every month or part thereof of such delay

jfFsL s L /x]sf] s f] /sddf k|To] To]s dlxgf / dlxgfsf] efudf jflif{s s !% % k|ltztsf ltztsf b/n] x'g]g] /sd .

Penalty for Making False or Misleading Statements

e' m¶f jf e|dk" dk"0f{ 0f{ ljj/0f bflvnf ug]nfO{ { fO{ n nfUg] z'Ns Ns Banskota & Co., Chartered Accountants Tel: +977-1-4440935, e-mail: [email protected]


-

If made without knowingly or recklessly

hfgfhfgL gu/]sf] s f] -

jf

nfk/afxLk"j{j{s s

If made knowingly or recklessly hfgfhfgL jf

-

50% of such s uch underpayment

36L s/ /sdsf] krf; k|ltzt ltzt -

100% of such underpayment

36L s/ /sdsf] Ps ;o k|ltzt ltzt

nfk/afxLk"j{js { u/]sf] s f] 11. Special Provision for women through Finance Act .

Where the title of the land and building is transferred to a female, in whatever manner, then rebate on the registration fees is allowed as follows:

h'g;' g;'s} s} k|sf/af6 sf/af6 dlxnfsf] gfddf :jfldTj k|fKt fKt x'g]g] u/L kfl/t x'g]g] lnvtdf o; P] g adf]lhd l hd nufOPsf] 3/hUuf /lhi6« ]zg z g b:t'/df /df lgDg 5'6 x'g5 5 ] : -

In case of municipal areas 25%

gu/ If]qsf] q sf] eP @% k|ltzt ltzt / -

In case of V.D.C 30%

uf=lj=;= If]qsf] q sf] ePdf #) k|ltzt . ltzt .

12. Health service tax

-

Health service tax is levied and collected on services of entities other than Government hospitals and Public hospitals. 5% tax is levied on the invoice value issued by such entities.

g]kfn k fn ;/sf/n] k|bfg bfg ug]{ :jf:Yo ;]jf j f / ;fd'bflos bflos c:ktfnx¿n] k|bfg bfg ug]{ :jf:Yo ;]jf j f afx]ssf s sf cGo lgsfox¿n] k|bfg bfg ug]{ :jf:Yo ;]jfx¿df j fx¿df hf/L lahs d"Nosf] Nosf] kfFr k|ltztsf ltztsf b/n] :jf:Yo ;]jf s/ nufOg] / c;'npk/ npk/ ul/g]5 . -

Such tax shall be collected by the natural persons, instutions or e ntities by issuing tax invoice.

;]jf j f s/ To:tf] ;]jf j f k|bfg bfg ug{ ] JolQm, ;+ :yf :yf jf lgsfon] ] lahs hf/L u/L c;'npk/ npk/ ug'{ kg]5 { . -

The details of such tax shall be filed on trimester tr imester basis within 25 days of the end of such trimester.



;f]sf] s f] ljj/0f rf}dfl;s d fl;s ¿kdf k|To] To]s rf}dfl;s d fl;s cjlw ;dfKt ePsf] kRrL; lbgleq ;DalGwt cfGtl/s /fh:j sfof{nodf n odf bflvnf ug'{ kg]5 { . -

Ns tyf Jofh Interest and fees z'Ns If tax is not deposited within the specified time .

15% p.a

Dofbleq s/ bflvnf gu/] df df . If the return is not submitted within time.

Rs. 1,000 per return

ljj/0f bflvnf gu/]df d f .

13. Education service fee - 1% Education service fee is levied and collected on admission fee and monthly tuition fee of all Private education institutions providing education service above Higher Secondary Level and educational institutions situated in Kathmandu valley, sub-metropolitan cities, municipality, district

headquarters and areas specified by the IRD of respective areas.

lghL If]qaf6 q af6 ;~rflnt b]zel/sf z el/sf pRr dfWolds lzIffeGbf dflysf] lzIff k|bfg bfg ug]{ lzIf0f ;+:yfx¿, : yfx¿, / sf7df8f}+ pkTosfleq tyf pkdxfgu/kflnsf, gu/kflnsf / lhNnf ;b/d'sfdl:yt sfdl:yt pRr dfWolds lzIff;Ddsf] lzIff k|bfg bfg ug]{ lzIf0f ;+:yfx¿n] : yfx¿n] c;'n ug]{ egf{ z'Ns Ns / dfl;s lzIf0f z'Nsdf Nsdf Ps k|ltztsf ltztsf b/n] lzIff ;]jf j f z'NsnufOg] / c;'npk/ npk/ ul/g]5 . -

Education service fee shall be collected by such educational institutions institutions by issuing a tax invoice.

lzIff ;]jf j f z'Ns Ns To:tf] lzIf0f ;+:yfx¿n] : yfx¿n] lahs hf/L u/L c;"npk/ npk/ ug'{ kg]5 { . -

Educational Educational institutions collecting Education service fee shall submit s ubmit the details of such fees and deposit such fees with 25 25 days of the end of every trimester in the IRD department or the in the District Treasury Office.

lzIff ;]jf j f z'Ns Ns c;"n ug]{ lzIf0f ;+:yfn] : yfn] c;"n u/]sf] s f] /sd / ;f]sf] s f] ljj/0f rf}dfl;s d fl;s ?kdf k|To] To]s s rf}dfl;s d fl;s cjlw ;dfKt ePsf] kRrL; lbgleq cfGtl/s /fh:j sfof{no n o ePsf] lhNnfdf ;f] sfof{nodf n odf / cfGtl/s /fh:j sfof{no n o gePsf] lhNnfdf sf]ifi f tyf n]vf v f lgoGqs sfof{nodf n odf bflvnf ug'{ kg]5 { .



-

Ns tyf Jofh Interest and fees z'Ns If tax is not deposited within the specified time.

15% p.a

Dofbleq s/ bflvnf gu/] df df . If return is not submitted s ubmitted within time.

Rs. 1,000 per return

ljj/0f bflvnf gu/]df d f . -

1% Education service fee shall be levied and collected from the t he students departing for abroad study at the time of providing foreign exchange.

ljb]z cWoog ug{ hfg] ljBfyL{nfO{ n fO{ lzIf0f z'Ns Ns afkt ljb]zL z L d'b|bfsf] f| sf] ;6xL ;'ljwf ljwf lbFbf b f To:tf] ;6xL /sddf Ps k|ltzt ltzt lzIff ;]jf j f z'Ns Ns nufOg]5 / c;"npk/ npk/ ul/g]5 .

14. Contact Shailendra Uprety, ACA Partner

Banskota & Company Chartered Accountants

46, New Plaza Road Putalisadak Kathmandu, Nepal P.o. Box.: 5637 Tel: +977-1-4440935 Fax:+977-1-4440928 e-mail: [email protected]

Disclaimer:: This booklet is for general information purposes only. Disclaimer

The information on this booklet consists of

materials which have been obtained from Income Tax Act 2058, IT Rules 2059 and manuals and material from similar sources. However, this does not constitute advice or guidance. We encourage users to cross-check the information before taking any action thereon. We accept no liability for the results of any action taken on the basis of the Information provided in this booklet. Information in this booklet is not offered as advice on any particular matter and must not be treated as a substitute for specific advice.



Nepal Tax

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