Thresholds, the 30-day registration window, documents, and what changes once you're registered — assessed and filed by an accounting-led team that handles this every week, not a one-time filing service.
Last updated: September 2, 2026
VAT — Value Added Tax — is a 13% tax on most goods and services in Nepal, administered by the Inland Revenue Department under the VAT Act 2052. Once registered, your business collects VAT from customers on taxable sales (output VAT), can reclaim the VAT it pays on its own business purchases (input VAT), and remits the net difference to IRD every month.
Registration isn't optional once you cross the threshold below — it's a legal requirement with a firm 30-day window and real penalties for missing it. For businesses below the threshold, it's a genuine choice worth actually running the numbers on, not just something to defer indefinitely.
Registration becomes mandatory once your rolling 12-month turnover — not your fiscal-year total — crosses either line:
| Business type | Mandatory threshold |
|---|---|
| Goods-only business | NPR 50 lakh (5,000,000) rolling 12-month turnover |
| Services or mixed goods & services | NPR 30 lakh (3,000,000) rolling 12-month turnover |
The rolling-12-month measurement matters more than it sounds: a strong season or one large contract can push a business over the line mid-year, well before a fiscal-year total would suggest it. Businesses operating close to either threshold need to track turnover continuously, not check it once a year at filing time.
Certain businesses must register for VAT from their very first sale: liquor and tobacco manufacturers and distributors, brick manufacturers, electronics and motor parts dealers, restaurants with bars, tax consultancy and accounting firms, education consultancies, travel and trekking agencies, software companies, and importers of taxable goods. If your business falls into one of these, the turnover thresholds above don't apply — build VAT registration into your first week of operations, not your first year.
Even below the mandatory threshold, a business can register voluntarily — and it's sometimes the right call, since registration lets you reclaim input VAT paid on your own purchases. Whether that nets out favorably depends on your cost structure: a business with significant VAT-bearing input costs (equipment, inventory, professional services from VAT-registered vendors) tends to benefit more than one with mostly labor costs and few VAT-bearing purchases. We can run this comparison for your specific numbers before you decide either way.
VAT registration builds on an existing PAN — you can't register for VAT without one already issued.
We confirm whether you're already required to register (mandatory threshold or a listed sector), or whether voluntary registration makes sense for your cost structure.
Business registration certificate, PAN certificate, and business details are submitted to IRD through the registration process.
Once approved, your VAT registration certificate is issued and your compliance clock starts immediately — from that date, not your next fiscal year.
We set up your invoicing and bookkeeping to correctly track output and input VAT from day one, so your first return — due by the 25th of the following month — isn't a scramble.
VAT registration is a real ongoing compliance commitment, not a one-time filing. Once registered: you charge 13% VAT on taxable supplies and file monthly returns, typically due by the 25th of the following month. Every invoice from the registration date forward needs to correctly show VAT, and every VAT-bearing purchase you make needs to be recorded as input VAT. Your books need to separate output VAT (collected from customers) from input VAT (paid on purchases) so the monthly return nets them out correctly. Our free Debit/Credit Note generator handles the VAT-inclusive math if you need to issue a correction on a filed VAT invoice.
A strong season can trigger the threshold months before an annual total would suggest it. Track the rolling 12-month figure continuously, not periodically.
Services and mixed businesses cross the line at the lower NPR 30 lakh figure, not NPR 50 lakh.
The compliance clock starts the day your certificate is issued — the first monthly return is due before many businesses have even updated their invoicing.
NPR 50 lakh for goods-only businesses, NPR 30 lakh for services or mixed businesses, on a rolling 12-month basis. Certain sectors must register from day one regardless of turnover.
30 days from when you actually cross the line. Missing it means a registration penalty plus a percentage of the unpaid VAT.
Yes, and it's worth it if your input VAT is significant relative to output VAT. We can run the numbers for your business before you decide.
A flat 13% on most taxable supplies.
Monthly VAT returns, typically due by the 25th of the following month, reconciling output and input VAT.
Yes — VAT registration builds on an existing PAN.
Yes — threshold assessment, documents, submission, and setting up your first return correctly. Get in touch to get started.
Tell us your turnover and business type — we'll tell you exactly where you stand and what it takes.
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