Nepal VAT Guide for 2026: Rates, Registration & Compliance
Nepal applies a 13% VAT on most goods and services. This guide covers registration thresholds, invoicing rules, and monthly return filing for resident and nonresident sellers.
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Key Takeaways
Nepal's VAT is a single standard rate of 13% on most goods and services, with exports zero-rated and basic agricultural products, health, education, and financial services exempt. A business registers once annual turnover exceeds NPR 5 million for goods or NPR 3 million for services, and non-resident providers of digital services to Nepali consumers must register separately and charge 13% under the non-resident VAT regime. SaaS and digital services are taxable at 13% VAT, and the non-resident provider may also owe a separate 2% Digital Service Tax.
Taxability Snapshot
SaaS
Taxable
Digital Goods
Taxable
Sales Tax Rates
Nepal's Value-Added Tax (VAT) is a single standard rate of 13% on most goods and services, administered by the Inland Revenue Department (IRD) under the VAT Act 2052. Exports are zero-rated, and basic agricultural products, health, education, and financial services are exempt [1]. A separate 2% Digital Service Tax (DST) applies to non-resident digital-service income as a direct tax, distinct from VAT [2].
Rate | Applies to |
|---|---|
Standard 13% | Most goods and services, including non-resident digital services |
Zero 0% | Exports of goods and services |
Exempt | Basic agriculture, health, education, financial and insurance services |
For more detail, see our APAC VAT guides.
Registration & nexus threshold
Nepal uses VAT registration thresholds, not US-style economic nexus. A business must register for VAT once annual turnover exceeds NPR 5 million for goods, or NPR 3 million for services and for mixed goods-and-services [1]. Non-resident providers of digital services to Nepali consumers must register for VAT and charge 13% under the non-resident VAT procedure; a separate 2% Digital Service Tax also applies to non-residents whose annual digital-service transactions in Nepal exceed NPR 3 million [2][3]. Registration steps are in the How to Register section.
Filing frequency & deadlines
VAT returns are filed monthly, with the return and payment due by the 25th of the following month on Nepal's Bikram Sambat calendar. Foreign-currency receipts are converted to rupees at the Nepal Rastra Bank rate on the filing date. The Digital Service Tax is filed annually on the income-tax basis [2][3].
Exemptions
Exports are zero-rated, and Schedule-1 exemptions cover basic agricultural products, medical and health services, education, and financial and insurance services [1]. SaaS and digital services supplied to Nepali consumers are taxable at 13% VAT, and the non-resident provider may also owe the 2% Digital Service Tax [2].
Penalties
Late payment of VAT accrues interest at 15% per year plus an additional fee, and late or non-filing carries per-return penalties that compound each month until compliance [1]. Failing to register when required draws a further fixed penalty per tax period [1].
Sources
[1] Inland Revenue Department (Nepal) — official portal (13% VAT rate and administration)
[2] Inland Revenue Department (Nepal) — VAT procedure for non-resident persons, 2079
[3] Inland Revenue Department (Nepal) — Procedure relating to Digital Service Tax, 2079 (2% DST)
Verified July 2026 against Inland Revenue Department (Nepal) guidance.
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