TAX RATES > Nepal Tax Rates

Nepal Tax Rates

Nepal Income Tax Rates for Individuals

Nepal individual income tax rates are progressive to 25%. Tax exemption limit is Rs.160,000 for individuals and Rs.200,000 for couples:

Tax rates for resident individuals
Income (Rs.)                 Tax Rate
0 - 160,000                    1%
160,001 - 260,000          15% (+ Rs. 1,600)
Above Rs. 260,000          25% (+ Rs. 16,600)

Tax rates for Married (including widow & widower)
Income (Rs.)                 Tax Rate
0 - 200,000                    1%
200,001 - 300,000          15% (+ Rs. 2,000)
Above Rs. 300,000          25% (+ Rs. 17,000)

Tax rates for Proprietorship Firm - single
Income (Rs.)                 Tax Rate
0 - 160,000                    0%
160,001 - 260,000          15%
Above Rs. 260,000          25% (20% for Export Income and Income from Special Industry) + Rs. 15,000

Tax rates for Proprietorship Firm - married
Income (Rs.)                 Tax Rate
0 - 200,000                    0%
200,001 - 300,000          15%
Above Rs. 300,000          25% (20% for Export Income and Income from Special Industry) + Rs. 15,000

Having only Business Income with Annual Turnover up to Rs 20 Lacs and Annual Income up to Rs. 2 Lacs
- In the Metropolitan or Sub Metropolitan Cities Rs. 5000
- In the Municipalities Rs. 2500
- In the rest of Nepal Rs. 1500

Tax Rate for Non Resident Natural Person: Taxable income of a non resident natural person shall be taxed at 25%.

- Resident Disabled Individual shall get an additional 50% of Exemption Limit (i.e. 50% of Rs. 200,000 in case of couple & Rs. 160,000 in case of single).
- Resident Woman, having only Remuneration Income, shall be entitled to a Tax Rebate of 10%.
- Individual having Life Insurance Policy shall get an additional exemption from hid Taxable
- Income to the extent of Rs. 20,000 or Premium Amount, whichever is lower. 4. Husband and Wife, having separate income source, are given option either to get assessed separately or jointly as family.
- Annual Remote Area Allowance up to Rs. 30,000 is exempted from tax.
- Employees working in Nepalese Mission abroad are allowed 75% exemption on Foreign Allowances.
- There is no levy of any Additional Income Tax

Rebate on Tax Liability for Resident Female with only employment income - A female resident natural person having only remuneration income from employment shall be provided with a rebate of 10% on the tax liability on tax calculated as above.

Tax on Non Business Chargeable Assets - Gain from disposal of Non Business Chargeable Assets are taxed at 10% after taking into consideration exemption limit (i.e Rs.1,60,000 for individual and Rs.2,00,000 for couples). In case of land and buildings, if the disposed land & buildings has been owned for more than 5 years, tax rate of 5% shall apply.

Gain from Non Business Chargeable Assets includes
- gain from sale of shares of companies,
- gain from sale of land and building owned and resided for less than 10 years and disposed for more than Rs.50 lakhs.

Special Tax Rates for Natural Persons

Particulars                                                                       Applicable Tax Rates
For incomes earned from operating special industries          20% where 25% tax rate applies
For incomes earned from export business                           20% where 25% tax rate applies

Tax Deductions and Facilities for Resident Persons

Life Insurance Premium - While calculating taxable income, life Insurance premium paid by a resident natural person is deductible up to the limit of Rs 20,000.

Employees working in Diplomatic Agencies - 75% of foreign allowance is deducted from taxable income in case of an employee employed at diplomatic agencies of Nepal situated at foreign countries.

Incapacitated natural persons - In case of incapacitated natural persons, the minimum exemption limit (Rs.1,60,000 for individual and Rs.2,00,000 for couples) is increased by additional 50%.

Remote Area Benefit - In case of resident natural persons working in remote areas, minimum exemption limit shall be increased by Rs 30,000, Rs 24,000, Rs 18,000, Rs 12,000 or Rs 6,000 depending on remote area category of A, B, C, D and E prescribed in Income Tax Rules 2059.

Additional limit for pension income - If income of a resident natural person includes pension income, the taxable income is first reduced by additional 25% or pension amount included in income whichever is lower and then tax liability is calculated on balance income.

Tax Credits for Resident Persons

Medical Tax Credit - In case of approved medical expenses, medical tax credit is available to resident natural persons as deduction from tax liabilities. The limit prescribed is Rs.750 or 15% of Approved medical expense or actual approved medical expense incurred whichever is lower. Any unutilized expenses can be carried forward to next year.

Foreign Tax Credit - If foreign income is included in taxable income of a resident person, foreign tax credit for tax paid in foreign country in respect of that income. The foreign tax paid can either be deducted as expense or tax liability in Nepal can be reduced by such tax paid up to average rate of tax applicable in Nepal, depending on the option of tax payer.


Nepal Corporate Tax Rates

The standard rate of corporate tax in Nepal is 25%. However, different entities are taxed at different rates:

Particulars / Tax Rate
- Bank, Finance Company, General Insurance Company, Petroleum Entities: 30%
- Cigarette, Tobacco, Beer and Alcohol Company: 30%
- Special Industries & IT Industries: 20%
- Entities engaged in construction & operation of Road, Bridge, Tunnel, Ropeway, Trolley Bus and Tram: 20%
- Co-operative Institution registered under Co-operative Act, 2048 (other than co- operatives dealing in except dealers in Exempted Transaction): 20%
- Entity wholly engaged in the (BOOT) projects conducted so as to build public infrastructure, own, operate and transfer it to the HMG & in power generation, transmission, or distribution: 20%
- Non-resident person Providing Shipping, Air Transport or Telecommunications Services in Nepal: 5%
- Private Limited Co., Limited Co., Partnership Firm not specifically mentioned above: 25%
- Airline Services having office in and business in Nepal but not operating flights to and within Nepal: 2%
- All Export Entities: 20%
- Repatriation of income of a Foreign Permanent Establishment of a Non-Resident situated in Nepal: 5%

Reduced Tax Rates

Corporate Groups Applicable tax rate
- Information Technology industries: 22.5%
- Special Industries and Information Technology Industries providing direct employment to 300 or more Nepalese citizens during a period: 90% of applicable rate
- Special Industries providing direct employment to 1200 or more Nepalese citizens during a period: 80% of applicable rate
- Special Industries providing direct employment to more than 100 Nepalese citizens during a period 33% of which are women, incapacitated and dalits: 80% of applicable rate
- Special Industries operating in very undeveloped area: 50% of applicable rate
- Special Industries operating in undeveloped area: 70% of applicable rate
- Special Industries operating in underdeveloped area: 75% of applicable rate
- Industries established in Special Economic Zone of mountain district as specified by the government and hilly district: 0% for 10 years & 50% thereafter
- Industries established in Special Economic Zone of other areas: 0% for 5 years and 50% thereafter (In case of dividend of such industries, dividend tax is exempt for first five years of operation and 50% concession is provided for dividend tax in next three years)
- Income from foreign technology, management fee and royalty earned by foreign investor from industries established in special economic zone: 50% of applicable rate
- Industries established in remote areas: 0% for 10 years
- Information Technology based industries established at prescribed Information Technology park: 75% of Normal Rate
- Licensed Industries engaged in production and distribution of electricity, if the production and distribution is completed
by the end of Chaitra 2075: 100% exemption for first 7 years, 50% for next 3 years.

Tax Rates for Non Residents

Particulars / Applicable Tax Rates
- For incomes earned from operation of water transport, charter service or air transport or by operating a cable, radio, optical fiber or earth-satellite communication business from the transmission of news or information through the equipments installed in Nepal: 5%
- For incomes earned from providing air transport, water transport or telecommunication services within the territory of Nepal: 2%
- On repatriation of income by Foreign Permanent Establishment: 5%

Advance Income Tax

Income Tax for fiscal year should be paid in 3 installments as follows:

Instalment       Time Period                                    Amount
First                Up to Mid-January (Poush end)          40%
Second            Up to Mid- April (Chaitra end)            70%
Third               Up to Mid-July (Ashadh end)              100%

Where an instalment of tax paid by a person is less than 80% of Tax Payable, interest shall be levied @ 10% for each month and part of month from the date of first installment on the amount to the excess of 80% of the instalment that would have paid over the installment paid.

The presumptive tax-payers need not require paying any advance tax as above. Further if the Tax Amount for the fiscal year is less than Rs 5000, installment is not required to be paid.

Carry Forward of Loss

- Carry Forward of Loss from Business and Investment can be made up to 7 years.
- Carry Forward of Loss can be made up to 12 years in case of Projects building, operating & transferring public infrastructure to the Nepal Government, Projects building Electricity Production House, generating & transmitting electricity and entities dealing in petroleum products under Nepal Petroleum Act, 2040.
- Loss incurred in business or investment where assessee enjoys full / partial tax exemption cannot be carried forward.

Penalty for Non-Filing of Income Tax Return on Time

- Non-Filing of Estimated Income Tax Return Income u/s 95 within due date shall attract penalty of Rs. 2000 per Return.
- Non-Filing of Income Tax Return Income u/s 96 within due date shall attract penalty of @ 0.10% of Annual Turnover or Rs. 100 per month whichever is higher.

Tax Concession and Rebates

- 10 Years Tax Holiday from date of operation and 50% Tax Rebate thereafter to industries established in Special Economic Zone (SEZ) of Himalayan Districts and other prescribed Hilly District.
- 5 Years Tax Holiday from date of operation and 50% Tax Rebate thereafter to industries established in other Special Economic Zone (SEZ).
- 100% Rebate for first 5 Years from date of operation and then 50% Rebate for next 3 Years on dividend distributed by industries established in Special Economic Zone (SEZ).
- 50% Rebate on Income Tax on income from Foreign Technology or Management Consultancy or Royalty earned by foreign investors of industry established in SEZ.
- 10 Years Tax Holiday from date of operation to industries established in remote areas.
- 25% Tax Rebate to IT Industries established in prescribed Information Technology Park.
- Entities having license for Electricity generation, transmission & distribution, if commences generation / generation & transmission / generation & distribution / generation, transmission & distribution of Hydro-electricity commercial manner by Chaitra end, 2075; such entities shall have Tax Holiday for a period of first 7 Years and 50% Tax Rebate thereafter for 3 Years, from date of such commencement of generation, transmission & distribution. Such facilities shall also be applicable for Electricity generated from Solar/Wind/Organic Materials.
However, entities already having started commercial production of electricity before Shrawan 01, 2066 shall be eligible for facility as prevalent at the time of obtaining license
- 50%, 30% & 25% Rebate on Income Tax for 10 Years including the year of operation to Special Industries operating in Highly Undeveloped, Undeveloped & Under-developed areas respectively.
- 10 % Rebate on Income Tax to Special Industries and IT Industries which provide direct employment to 300 Nepalese nationals throughout the year. [Earlier, it was 500 Nepalese].
- 20 % Rebate on Income Tax to Special Industries which provide direct employment to 1200 Nepalese nationals throughout the year.
- 20 % Rebate on Income Tax to Special Industries which provide direct employment to 100 Nepalese nationals including 33 percent women, dalits (the downtrodden) or the handicapped, throughout the year

Tax Deduction at Source (TDS) rates

Resident employer should withhold tax while making employment income payment with sources in Nepal to an employer as follows.
(Monthly TDS = Annual Tax calculated as per schedule 1 on annual employment income divided by 12)

Particulars / Tax Rates

- On Interest, Royalty, Service Charge, Retirement Payment having source in Nepal, except mentioned otherwise: 15%
- Payment made to resident person on Service Charge invoiced in VAT bill: 1.5%
- On Nepal sourced Interest by Banks and financial institutions and/or listed companies to a natural person. Such payment should not be made in connection with operation of any business: 5%
- On payment made by a resident person for rent having source in Nepal: 10%
- On payment of gain from Investment Insurance: 5%
- On payment of gain from retirement fund: 5%
- On payment of commission by resident employer company to a non resident person: 5%
- On payment of lease rental of aircraft: 10%
- On payment of premium to non-resident insurance companies: 1.5%
- On gain from transaction on commodity future market: 10%
- On windfall gains except national and international level prizes as prescribed by Nepal Government: 25%


Nepal vat (Value Added Tax)

Standard rate of Value Added Tax in Nepal is 13%. Certain goods/services are exempt.

Entity having turnover of Rs.2.0 million or more is required to get registered with Valu Added Tax Office and 13% VAT shall be applicable to it.


Go to Tax Rates Home Page




Income Tax Rate

Corporate Tax Rate

Sales Tax / VAT Rate

Last Update:  Nov 2010

(This page may show previous year's tax rates. Always check last update time)

Albania Tax RatesALBANIA
Algeria Tax RatesALGERIA
Andorra Tax RatesANDORRA
Angola Tax RatesANGOLA
Anguilla Tax RatesANGUILLA
Antigua & Barbuda Tax RatesANTIGUA & BARBUDA
Argentina Tax RatesARGENTINA
Aruba Tax RatesARUBA
Australia Tax RatesAUSTRALIA
Austria Tax RatesAUSTRIA
Azerbaijan Tax RatesAZERBAIJAN
Bahamas Tax RatesBAHAMAS
Bahrain Tax RatesBAHRAIN
Bangladesh Tax RatesBANGLADESH
Barbados Tax RatesBARBADOS
Belarus Tax RatesBELARUS
Belgium Tax RatesBELGIUM
Belize Tax RatesBELIZE
Benin Tax RatesBENIN
Bermuda Tax RatesBERMUDA
Bosnia & Herzegovina Tax RatesBOSNIA & HERZEGOVINA
Botswana Tax RatesBOTSWANA
Brazil Tax RatesBRAZIL
British Virgin Islands Tax RatesBRITISH VIRGIN ISLANDS
Brunei Tax RatesBRUNEI
Bulgaria Tax RatesBULGARIA
Burkina Faso Tax RatesBURKINA FASO
Burma Tax RatesBURMA
Burundi Tax RatesBURUNDI
Cambodia Tax RatesCAMBODIA
Cameroon Tax RatesCAMEROON
Canada Tax RatesCANADA
Cape Verde Tax RatesCAPE VERDE
Cayman Islands Tax RatesCAYMAN ISLANDS
Central African Republic Tax RatesCENTRAL AFRICAN REP.
Chad Tax RatesCHAD
Chile Tax RatesCHILE
China Tax RatesCHINA
Colombia Tax RatesCOLOMBIA
Comoros Tax RatesCOMOROS
Democratic Republic of Congo Tax RatesCONGO, DEM. REPUBLIC
Republic of Congo Tax RatesCONGO, REPUBLIC OF
Cook Islands Tax RatesCOOK ISLANDS
Costa Rica Tax RatesCOSTA RICA
Cote d'Ivoire Tax Rates Ivory CoastCOTE D'IVOIRE
Croatia Tax RatesCROATIA
Cuba Tax RatesCUBA
Curaçao Tax Rates - Curacao Tax RatesCURAÇAO
Cyprus Tax RatesCYPRUS
Czech Republic Tax RatesCZECH REPUBLIC
Denmark Tax RatesDENMARK
Djibouti Tax RatesDJIBOUTI
Dominica Tax RatesDOMINICA
Dominican Republic Tax RatesDOMINICAN REPUBLIC
Ecuador Tax RatesECUADOR
Egypt Tax RatesEGYPT
El Salvador Tax RatesEL SALVADOR
Equatorial Guinea Tax RatesEQUATORIAL GUINEA
Estonia Tax RatesESTONIA
Fiji Tax RatesFIJI
Finland Tax RatesFINLAND
France Tax RatesFRANCE
French Polynesia Tax RatesFRENCH POLYNESIA
Gambia Tax RatesGAMBIA
Georgia Tax RatesGEORGIA
Germany Tax RatesGERMANY
Ghana Tax RatesGHANA
Gibraltar Tax RatesGIBRALTAR
Greece Tax RatesGREECE
Grenada Tax RatesGRENADA
Guatemala Tax RatesGUATEMALA
Guernsey Tax RatesGUERNSEY
Guyana Tax RatesGUYANA
Honduras Tax RatesHONDURAS
Hong Kong Tax RatesHONG KONG
Hungary Tax RatesHUNGARY
Iceland Tax RatesICELAND
India Tax RatesINDIA
Indonesia Tax RatesINDONESIA
Iran Tax RatesIRAN
Ireland Tax RatesIRELAND
Isle of Man Tax RatesISLE OF MAN
Israel Tax RatesISRAEL
Italy Tax RatesITALY
Ivory Coast Tax RatesIVORY COAST
Jamaica Tax RatesJAMAICA
Japan Tax RatesJAPAN
Jersey Tax RatesJERSEY
Jordan Tax RatesJORDAN
Kazakhstan Tax RatesKAZAKHSTAN
Kenya Tax RatesKENYA
Kuwait Tax RatesKUWAIT
Latvia Tax RatesLATVIA
Lebanon Tax RatesLEBANON
Lithuania Tax RatesLITHUANIA
Luxembourg Tax RatesLUXEMBOURG
Macau Tax RatesMACAU
Madagascar Tax RatesMADAGASCAR
Madeira Tax RatesMADEIRA
Malawi Tax RatesMALAWI
Malaysia Tax RatesMALAYSIA
Maldives Tax RatesMALDIVES
Malta Tax RatesMALTA
Mauritius Tax RatesMAURITIUS
Mexico Tax RatesMEXICO
Moldova Tax RatesMOLDOVA
Monaco Tax RatesMONACO
Montenegro Tax RatesMONTENEGRO
Morocco Tax RatesMOROCCO
Mozambique Tax RatesMOZAMBIQUE
Myanmar Tax RatesMYANMAR
Namibia Tax RatesNAMIBIA
Nepal Tax RatesNEPAL
Netherlands Tax RatesNETHERLANDS
Netherlands Antilles Tax RatesNETHERLANDS ANTILLES
New Zealand Tax RatesNEW ZEALAND
Nicaragua Tax RatesNICARAGUA
Nigeria Tax RatesNIGERIA
Norway Tax RatesNORWAY
Oman Tax RatesOMAN
Pakistan Tax RatesPAKISTAN
Palestine Tax RatesPALESTINE
Panama Tax RatesPANAMA
Papua New Guinea Tax RatesPAPUA NEW GUINEA
Paraguay Tax RatesPARAGUAY
Peru Tax RatesPERU
Philippines Tax RatesPHILIPPINES
Poland Tax RatesPOLAND
Portugal Tax RatesPORTUGAL
Puerto Rico Tax RatesPUERTO RICO
Qatar Tax RatesQATAR
Romania Tax RatesROMANIA
Russia Tax RatesRUSSIA
Rwanda Tax RatesRWANDA
Saudi Arabia Tax RatesSAUDI ARABIA
Senegal Tax RatesSENEGAL
Serbia Tax RatesSERBIA
Sierra Leone Tax RatesSIERRA LEONE
Singapore Tax RatesSINGAPORE
Slovakia Tax RatesSLOVAKIA
Slovenia Tax RatesSLOVENIA
South Africa Tax RatesSOUTH AFRICA
South Korea Tax RatesSOUTH KOREA
Spain Tax RatesSPAIN
Sri Lanka Tax RatesSRI LANKA
Swaziland Tax RatesSWAZILAND
Sweden Tax RatesSWEDEN
Switzerland Tax RatesSWITZERLAND
Syria Tax RatesSYRIA
Taiwan Tax RatesTAIWAN
Tanzania Tax RatesTANZANIA
Thailand Tax RatesTHAILAND
Tunisia Tax RatesTUNISIA
Turkey Tax RatesTURKEY
Turks and Caicos Tax RatesTURKS AND CAICOS
Uganda Tax RatesUGANDA
Ukraine Tax RatesUKRAINE
United Arab Emirates Tax RatesUNITED ARAB EMIRATES
UK Tax Rates United KingdomUNITED KINGDOM
US Tax Rates United StatesUNITED STATES
Uruguay Tax RatesURUGUAY
Uzbekistan Tax RatesUZBEKISTAN
Vanuatu Tax RatesVANUATU
Venezuela Tax RatesVENEZUELA
Vietnam Tax RatesVIETNAM
West Bank Tax RatesWEST BANK
Yemen Tax RatesYEMEN
Zambia Tax RatesZAMBIA
Zimbabwe Tax RatesZIMBABWE

Tax Rates
Tax Rates
Global Average Tax Rates
Historical Tax Rates
Tax News
Tax Videos
Tax Articles
IRS Tax Forms

© 2009-2012
2011 - 2012 Tax Rate Guide and Tax Help Website