Skip to main content

Who gets taxed in Nepal?

Who gets taxed in Nepal? Isn’t that straight forward question? The simple answer would be whoever earns an income. But, believe me.. it isn’t that simple. Income Tax Act, 2058 uses the term “person” for those who will be taxed in Nepal. It, actually, bifurcates the person into two categories:

1) Natural Persons

2) Entity (Artificial Person)

1) Natural persons are further classified into four border categories.

a) Single natural person

b) Couple who opted to be taxed as a single person

Clarification: For the purpose of taxation, each of the spouses is treated as a single natural person unless they opt to file tax jointly as a couple.

Figure 1: Answer to who gets taxed in Nepal?
c) A widow or widower with dependent, and

Clarification: For the purpose of taxation, a widow or widower with dependents is treated as a couple.

d) Sole proprietorship firm.

2) Entity, on the other hand, have many categories:

a) Partnership firm

Clarification: The partnership form should have less than 20 partners. If higher, that will be treated as a deemed company.

b) Trust

c) Company

Clarification: Company not only includes companies registered under the Companies Act but also, other institutions or body corporate incorporated under other Acts approved through Parliament such as Co-operatives, NGOs, Gorkhapatra Sansthan, Nepal Tourism Board, etc.

d) Local Authorities such as municipalities etc.

e) Central Government

f)  Foreign Government, and

g) Permanent Establishment

We are also active on Instagram, Facebook, and Tiktok. Just search for @arthabichar.nepal. Any questions or comments, please feel free to reach out. Thank you.
Labels:
Location: Kathmandu 44600, Nepal

Comments

Post a Comment

Most Viewed

Tax Collection Agency codes for IRD Offices all over Nepal

Inland Revenue Department Nepal has published the agency codes that shall be used for the collection of direct and indirect taxes for the general public's information. Each code consists of 9 numbers. There are in total 59 agency codes currently in use. From these codes, we can classify that there are four types of IRD offices currently in operation. 1) Inland Revenue Office 2) Tax Payer Service Office 3) Large Tax Payer Service Office, and 4) Medium Tax Payer Service Office When shall you use these codes? It shall be used while choosing the agency where the tax should be deposited while completing the form for depositing the taxes. Agency Code list below: S.N. Agency Code Name Address 1 305011620 Inland Revenue Office Lahan 2 305030201 Tax Payer Service office Phidim 3 305030301 Tax Payer Service office Illam 4 305030401 Tax Payer Service office Khandbari 5 305030601 ...
1 comment
Read more

How to get Personal Permanent Account Number (PAN No.) through online in Nepal?

The concerned Individual has to physically visit the nearest Tax Payer's Service Office or Inland Revenue Department with a copy of the citizenship and passport size photo to obtain PAN No. (Permanent Account Number). But, with Covid-19 disrupting daily life and restricting the movements, the Inland Revenue Department has finally decided to have it automated through its Online System. If you haven't yet registered for Permanent Account Number, you can do so by following the steps below: 1) Visit www.ird.gov.np and click on Taxpayer Portal 2) Click on Registration then, Application for Registration 3) Fill out the necessary detail & click Ok. Once that is done, it will be now going to the concerned IRD office for verification. Tax Officer will go through the detail submitted and verify it 4) Once verified, the concerned individual can log into tho the Tax Payer Portal system with the credentials provided earlier and obtain the PAN no. 5) If an individual needs a hard copy of...
Post a Comment
Read more

Takeaways from Nepalese Cooperative Audit Directive, 2075 effective 2075/05/07

Ministry of Agriculture, Land Management and Cooperatives issued a directive to better manage and bring quality and consistency in Audit of Cooperatives in Nepal. The government of Nepal approved the directive effective 2075/05/07 i.e. August 23, 2018. This is pretty important given the fact that Nepal Government has recognized co-operatives one of the pillars for country's development. Not only that, per data published by the Department of Co-operatives, almost 6 million Nepalese people are beneficiary of the co-operative with 34,512 registered and employing more than 60,517 people which is pretty significant. We have tried to present few key takeaways/ highlights of the directive for Nepalese, foreigners and those who are engaged with Cooperatives in one form or another. Hope this article will assist you in compliance and better manage the audit. 1) Furnishing information on Auditor's appointment must be done within 3 days and the following documents must...
2 comments
Read more