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

Given the lockdown due to Covid-19, the Nepal government through the Honorable minister-level decision has extended the period of submission of tax returns and applicable to Jestha 25, 2077 (i.e. 7th June 2020 ) .  Here's the applicable list for the same: 1) Monthly, Bi-monthly, and quarterly VAT returns for the month of Falgun and Chaitra along with the payment of VAT. 2)  Application of refund of VAT for Sec 25D provided the due date for application falls under the lockdown period. 3) Monthly Excise returns for the month of Falgun and Chaitra along with the payment of excise tax. 4) Withholding Taxes (TDS) for Falgun and Chaitra 5) Amended Estimated Tax Return for FY 2076/77 including 2nd installment Advance Tax originally required to be submitted by Chaitra end. This can be submitted by Jestha end , unlike others which have Jestha 25, 2077 as the deadline. 6) Education Service Fee, Telephone Ownership Fee, and Telecommunication Service Fee. In addition, Nepal Go

Extension of due date for filing returns The due date for filing eTDS, VAT and Excise returns, and payment of TDS, VAT, Excise Duty for the month of Falgun 2076 which becomes due on 25 Chaitra 2076 (7 April 2020) has been extended to 25 Baishak 2077 (7 May 2020). Due date for Depositing 2nd installment of advance tax The due date for deposit of the 2nd installment of Advance Tax that would have been due on 30 Chaitra 2076 (12 April 2020) has now been extended to 31 Baishak 2077 (13 May 2020). Tax relief for contributions to the Corona Infection Prevention Control and Treatment Fund Any amount contributed by a person (individual, couple or entity) to the Corona Infection Prevention Control and Treatment Fund established by the Government of Nepal and it's state shall be allowed as a deductible expense while calculating taxable income for the current Fiscal Year. Note: The above points were part of the relief measures announced by the Finance Minister on 29 March 2020.

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

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

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

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

Inland Revenue Department has issued a public notice to clarify the provisions regarding the deposit of 50% of the VAT Payable to Vendor directly to the Revenue Account of Nepal Government. Provision was introduced by the Finance Ordinance 2076 which has become effective since 2076/02/15 i.e. 29 May 2019. According to the circular: Provision is applicable for all contracts or supply of goods & services made to the Nepal Government or entities that are fully or partially owned by Nepal Government. Whenever the payment is made to the contractor or supplier or consultant, Nepal Government or entity owned by Nepal Government (fully or partially) must deduct the 50% of the VAT amount and deposit it to the following revenue code: Consultancy and Contract: 33114 Suppliers other than contract: 33113 The concerned entity must notify the consultant or contractor or supplier, once the deposit is made to the above revenue code. The amount for each consultant, contractor and supplie

Recent budget speech by the Honorable Finance Minister had made numerous changes in the Income Tax Act. We are going to cover each of those separately with various blogs in the next month or so. Today, we want to start with the Income from Salary as this will have a huge impact. Basically, there aren't any changes in how income from salary will be calculated or what will be included in the income from salary. The only change made with this budget speech is on the exemption limit on the taxable income. You can see the table below to know more: Income Limit Previous Current Indvidual NRs. 350,000 NRs. 400,000 Couple NRs. 400,000 NRs. 450,000

Process is straight forward, one is required to submit the online form along with the following documents: 1)       Copy of the Tax Clearance Certificate 2)       Copy of the Permanent Account Number (PAN) 3)       Copy of Company Registration Certificate 4)       User Manual for the software signed by company representative and stamped on each page 5)       Guarantee letter that Data Amendment or Edit (Manipulation) is not possible on the software 6)       Data Backup and Recovery System is available on the software 7)       System Architecture Detail 8)       Software Set Up file and Invoice Sample in Excel – 20 copies each in 20 pen drive 9)       Connection with Central Billing Management Software (CBMS) – API can be collected Service Branch of Inland Revenue Department After all the above documents are ready, One can submit the online form following procedures below: 1)       Log on to www.ird.gov.np 2)       Go to Taxpayer Portal 3)       Go to Ele

USAID, United States Agency for International Development, operates in most of the countries under the bilateral agreement similar to Nepal. Ministry of Finance represents Government of Nepal as a counterpart on these agreements with USAID. Based on those agreements, projects/programs are generally managed as 1) Contract 2) Co-operative Agreement, and 3) Grant. Irrespective of nature of the project/program, one of the main clause of the bilateral agreement is tax exemption status. Tax exemption status grants USAID projects access to  Value Added Tax (VAT), Customs Duty, and Excise Duty refund on the tax paid by them on purchases or imports made for the project. USAID projects here are International NGO, national NGO, companies, and firms managing projects/programs for USAID under the contractual arrangement. Let us now focus our attention on the Value Added Tax and how does it work for USAID Funded Projects. There is three status to be considered here: 1) An entity is registe

Did you know Kageshwari Manohara Municipality have announced a waiver of 10% tax? As per the public notice published in its website  on 2075/05/12, Municipality is waiving 10% tax on the following taxes that the municipality collects from its residents: 1) Property Tax (Land and Building) / सम्पत्ति कर (घर जग्गा कर) 2) Land Tax (Malpot) / मालपोत 3) Rental Tax / बहाल कर 4) Business Tax / व्यवसाय कर 5) Scrap Material Tax / कवाडी माल कर, and 6) Medicinal Herbs Tax / जडीबुटी कर According to the notice, residents of Kageshwari Manohara Municipality can benefit from this waiver by depositing the necessary tax by end of Ashoj / Ashwin 2075 in the respect Ward offices. And, this valid for Fiscal Year  2075/76 . So, hurry up..enjoy the benefit and be part of Nepal Government's slogan:  कर तिरौं , राष्ट्र निर्माणमा सहभागी  बनौं

Nepal Government has officially enabled the online payment of taxes levied by Inland Revenue Department per the decision of 2074/11/11. E-Payment (Online) Payment of taxes services is available to only those: a) who have availed Self Verification Service from Tax Payer's Office, thus, have username and password to log on to IRD  Tax Payer's Portal b) who have linked their company's bank account with Connect IPS , online payment service provider recognized by Nepal Government and managed by Nepal Clearing House Limited (NCHL) and thus, have a username and password. Those who do not have their bank account linked can easily do so by following the process below: Open www.connectips.com Create your Account ( Mobile No., Email id and Date of Birth is Mandatory for verification) Note Username and Password just entered while creating your account You will receive a verification code on your mobile and email, please input that get your account verified.  Now, to link

A tax clearance certificate confirms that an individual or entity: is in compliance with the Nepalese Income Tax Act, 2058 and its regulations, has submitted the tax return, audit report and necessary schedules, and all the taxes have been duly paid to the Government of Nepal Who issues Tax Clearance Certificate? The Inland Revenue Department (IRD) is authorized to obtain tax clearance certificate on behalf of the Ministry of Finance, Government of Nepal. How do I apply? An application must be filed at the concerned Tax Payer's office with NRs 10 stamp with the following documents enclosed: 1) Entity: Copy of the payment of taxes per Self Assessment submitted to IRD. Copy of the Audit Report duly audited by the member of the Institute of Chartered Accountants of Nepal (ICAN). Copy of the Previous Year Income Tax Return and Copy of Tax Clearance Certificate Obtained if any. Copy of the Permanent Account Number (PAN) Certificate. 2) Individual: In the c