# Nepal VAT Guide for 2026: Rates, Registration & Compliance

Canonical: https://trykintsugi.com/sales-tax-guides/apac/nepal
Published: July 19, 2026

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.

- **SaaS:** Taxable
- **Digital Goods:** Taxable

## 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

## 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](/sales-tax-guides/apac).

#### 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)](https://ird.gov.np/)

- [2] [Inland Revenue Department (Nepal) — VAT procedure for non-resident persons, 2079](https://ird.gov.np/content/8216/vatprocedurefornonresidentperson2079/)

- [3] [Inland Revenue Department (Nepal) — Procedure relating to Digital Service Tax, 2079 (2% DST)](https://ird.gov.np/)

Verified July 2026 against Inland Revenue Department (Nepal) guidance.

#### Frequently asked questions

### What is the VAT rate in Nepal?

The standard VAT rate is 13%, with exports zero-rated; a separate 2% Digital Service Tax applies to non-resident digital-service income.

### What is the VAT registration threshold?

Domestic registration is required above NPR 5,000,000 for goods or NPR 3,000,000 for services; non-resident digital providers register above NPR 3,000,000 over 12 months.

### Is SaaS taxable in Nepal?

Yes. SaaS supplied to Nepali consumers is subject to 13% VAT, and the non-resident provider may also owe 2% Digital Service Tax.

### What must a non-resident digital seller do?

Obtain a PAN and register for VAT once sales to Nepali consumers exceed NPR 3,000,000, charge 13% VAT, file monthly, and file DST annually.

### When are Nepali VAT returns due?

Monthly, by the 25th of the following month on the Bikram Sambat calendar; the Digital Service Tax is filed annually.

### What is the penalty for late Nepali VAT?

Late payment carries 15% annual interest plus additional fees, and late or non-filing draws per-return penalties that compound monthly.