Learn with NirmalAryal/Arthabichar Nepal - Guide to Entrepreneurs, Startups, and Business Enthusiast

Inland Revenue Department has published the updated VAT directive with the amendment as of 2076. This is a second amendment to the directive that was originally published in 2069 B.S. The main purpose of the directive is to bring consistency in the understanding of the taxpayers, tax administrators including different stakeholders. It is also believed that the directive will help the implementation of VAT even simpler. It is also part of the education/awareness program conducted by the department. As a general public, we also hope that this document will act as a bridge minimizing the confusion taxpayers have over the VAT Act and Regulation. Although, introduction of the Act itself has crossed two decades mark but still need was felt for more clarity especially some of the recent changes. So, we heartily welcome this document. You can find the  VAT Directive 2069, Second Amendment 2076  here.

Per Nepalese Income Tax Act - Tax Slab and Tax Rate for FY 2076.77 for those having Income Only from Employment Particulars Individual Couple Taxable Income (In NRs.) Incremental Taxable Income Tax on Incremental Taxable Income Taxable Income (In NRs.) Incremental Taxable Income Tax on Incremental Taxable Income First Slab 400,000.00 400,000.00 1%* 450,000.00 450,000.00 1%* Second Slab 500,000.00 100,000.00 10% 550,000.00 100,000.00 10% Third Slab 700,000.00 200,000.00 20% 750,000.00 200,000.00 20% Fourth Slab 2,000,000.00 1,300,000.00 30% 2,00,000.00 1,250,000.00 30% Fifth Slab Above 2,000,000.00 Greater than 2,000,000.00 36% Above 2,00,000.00 Greater than 2,000,000.00 36% Note(*): 1% Tax will not be levied in case of a natural person: a) Registered as Sole Proprietorship Firm b) Having income only from Retirement c) Contributing to the Retirement Fund and Social Security Fund Per Nepalese Income Ta Act - Tax Slab

Mirmire Laghubitta Biitiya Sanstha Limited (MMFDB) and Nagbeli Laghubitta Sanstha Limited (NBBL) have entered into a memorandum of understanding (MoU) for the acquisition Nagbeli Laghubitta Sanstha Limited. Trading in NEPSE for both the companies was halted from 2076/1/30 after they entered into a joint merger agreement with Kisan Microfinance Finance Limited (KMFL). However, the notice published on 2076/11/14 has not mentioned of Kisan Microfinance but only of Nagbeli. According to the notice, the MoU is effective from 2076/11/13. Trading of these two companies, MMFDB and NBBL will continue to remain on halt until the acquisition process is completed. Here's a copy of the notice provided to Nepal Stock Exchange Limited.

Through the 10th Amendment of the Income Tax Rules 2059, made on 2076 B.S. Nepal government has added a clause to add a contribution to Social Security Fund as a deductible expense. Notice was published in the Gazette on 2076/11/12. According to the new amendment, a person contributing to the Social Security Fund established per Social Security Fund Act, 2074 can deduct a minimum of a) contributed amount maximum up to NRs. 500,000 or  b) 1/3rd of Assessable Income What does it mean? It means a person who hasn't yet started a contribution to Social Security Fund or limited contribution to approved retirement funds such as Provident Fund and Citizen Investment Trust are availed existing deduction which is minimum of a) contribution amount up to NRs. 300,000 or b) 1/3rd of Assessable Income And, those contributing to Social Security will get an additional deduction of NRs. 200,000 (from NRs. 300,000 to NRs. 500,000) provided 1/3rd of his/her assessable income is

Industrial Enterprise Act that came into effect from 2076 B.S has classified industries into 5 different types. 1) Micro Enterprise: For any industry to be termed micro-enterprise, it must fulfill the following conditions: Fixed Capital worth up to Rs. 2 million (20 lakhs) excluding land and building Entrepreneur himself/herself is involved in the operation & management of the enterprise, A maximum staff member of nine including entrepreneur himself/herself. Annual turnover less than Rs. 10 million (1 crore) Uses 20 Kilowatt or less powerful motors, in case, the enterprise uses plant, machinery or equipment  2) Cottage Industry: For any industry to be termed as Cottage Industry, it must fulfill the following conditions: Based on Traditional Skill and technology Are labor-intensive and require specialized skill or local raw materials and based on local technology, art, and culture. Uses 50 Kilowatt or less powerful motors, in case, the enterprise uses plant, mach

Here's the recommended financial statement template by Nepal Accounting Standard (NAS) for Not for Profit Organizations (NGOs and INGOs) that you can download and modify to meet your requirements. These are developed to meet the common minimum information required of NPOs. Users can add additional information to ensure financial transparency and provide relevant information to different stakeholders. Nepal Accounting Standard board believes that by adopting the following template, users can easily understand the financial statements and also,  be able to compare with other NPOs. Model Financial Statement for NPOs (Based on NAS for NPOs) is given below: You can also download the template from the link below: Click Here

Not for Profit Organizations (NPOs) are also often referred to as Voluntary Organizations, Civil Society Organizations  Non-Governmental Organizations  Non-Profit Organizations Charities, and Other similar terms The requirement to register under a statute may apply to all charities and humanitarian agencies. Non Profit Organizations includes entities that: 1) are registered under the Associations Registration Act, 2034 (1977) or other appropriate Act with objectives that are carrying out social, religious, charitable, philanthropic and communities contribution activities. These registered organizations are generally affiliated with the Social Welfare Council for different social or communities or philanthropic activities in the jurisdiction of Nepal and hence those entities are known as NGOs, clubs, Ethnical Institutions, Political Institutions, Scientific Institutions, religious institutions, Cultural Charitable Institutions, Philanthropic Institutions. 2) are

Effective Date: Nepal Accounting Standard Board has published an Accounting Standard for Not for Profit Organizations in November 2019 effective Fiscal Year 2077/78 (July 16 2020, and onwards). Any organization adopting it to prior to the date above shall disclose the fact. Applicable Organization: NAS is applicable to all not for profit organization registered with the Social Welfare Council or working in Nepal under a general agreement, or project offices working under the bilateral agreement with Nepal Government and Foreign Government Purpose: Guide Not for Profit Organizations to prepare the general purpose financial statement to the entire non-profit organization as a single reporting entity . Improve the quality of the data to provide adequate information to the users of the financial statements Reduce the diversity that exists among NPOs in accounting practice and presentation We should note that NAS is based on the Going Concern assumption and the concep

Per Nepalese Income Tax, the income of social, religious, educational, or charitable organization of a public character registered without having a profit motive and similar other organizations as approved by the Inland Revenue Department are exempt. Since NGOs are registered as social organizations and INGOs through a general agreement with the Social Welfare Council, we were generally treating them as tax-exempt organizations and Inland Revenue Department was also issuing the tax exemption certificates for them. But, recently, Inland Revenue Department has stopped renewing tax-exempt certification of the NGOs/INGOs and also, stop issuing the new certificate to new registered NGO/INGOs. In such a context, we are here trying to analyze the potential impact on NGO/INGOs. We want to start by saying that irrespective of the tax exemption certificate, the following incomes were always taxable: 1) The organization has received the grant or won the bid that falls into the category of