VAT is Nepal's single largest source of indirect tax revenue, charged at a flat 13% under the VAT Act, 2052 — unchanged since its introduction in 1997.
When Registration Is Mandatory
Under Section 10 of the VAT Act, registration is required once annual turnover exceeds NPR 50 lakh for goods-only businesses, or NPR 30 lakh for services or mixed goods-and-services businesses. Turnover is measured on a rolling 12-month basis, and you must register within 30 days of crossing the threshold.
Certain Sectors Must Register From Day One
Specified sectors are required to register regardless of turnover — check whether your business activity falls into a mandatory-from-first-sale category before assuming the threshold applies to you.
How to Register
Apply through the IRD taxpayer portal (taxpayerportal.ird.gov.np) using your PAN credentials, upload your PAN certificate, OCR registration, MOA/AOA, and address proof. Clean applications are typically processed within 1–3 working days.
Exempt vs. Zero-Rated
Schedule 1 goods and services are VAT-exempt entirely (no VAT charged, no input credit claimable). Schedule 2 items are zero-rated — 0% VAT charged, but full input tax credit is still claimable, which is why exporters typically receive large VAT refunds.
Not sure if you've crossed the threshold, or want your VAT bill format checked? Company Sathi's tax team can review your registration status.
