Nepal VAT, in plain English

VAT in Nepal is a flat 13%, charged on most goods and services. It is governed by the Value Added Tax Act, 2052 (1995) and administered by the Inland Revenue Department (IRD) at ird.gov.np. Some items, such as basic foods, education, and health, are exempt or zero-rated.

VAT registration with the IRD becomes mandatory once your annual turnover crosses:

Below the threshold you can still register voluntarily. This is useful if your customers want VAT bills. Some categories must register regardless of turnover.

It depends on your transaction volume in the previous fiscal year:

Either way, the deadline is the 25th of the Nepali month following the period. Returns are filed on the IRD portal. Note: alternate reporting periods for brick, hotel, tourism, and film industries were withdrawn, so those sectors now follow the standard monthly cycle.

You can offset the VAT you paid on purchases (input VAT) against the VAT you collected on sales (output VAT). But the bill has to qualify:

• It must be a proper tax invoice. An abbreviated (17Ka) bill generally does not give a full input credit.
• The claim has a one-year window from the invoice. Miss it and the credit is gone.
• Some purchases (e.g. certain vehicles, entertainment) are restricted by Rule 17.

Over-claiming here is the most common reason returns get questioned. This is exactly the check HisabKitab runs on every bill.

Tax Deducted at Source is separate from VAT but lives in the same workflow. For FY 2082/83, rates run from 1.5% (on VAT-registered service providers) up to 25% on windfall gains. TDS is calculated on the VAT-exclusive base, and deposited to the IRD within 25 days of the month it was deducted.

VAT-registered businesses must retain tax invoices, purchase and sales registers, the stock register, and import/export records for at least 6 years after the end of the relevant fiscal year, physical or in an IRD-approved electronic format. HisabKitab keeps an append-only, audit-logged copy of every entry for exactly this reason.

You never touch a spreadsheet. The agent runs the full loop inside WhatsApp, and you stay the approver at every step:

1. You send a bill. A photo, a PDF, or a line of text, whatever is fastest in the moment.
2. It reads and classifies. Vendor, date, amount, and VAT are extracted; the bill is checked against the 17 / 17Ka and one-year-window rules above.
3. It asks when unsure. If anything is ambiguous, like a smudged total or a borderline credit, it asks you or routes to an accountant. It never invents a number.
4. You approve. Nothing is saved to your books without your ✅. The entry is then written once, with an audit trail.
5. It prepares your return. Before the 25th it assembles the period's VAT, self-verifies the totals in integer paisa, and nudges you.
6. You review and file. You file on the IRD portal yourself. HisabKitab prepares; it never files on your behalf.

What it takes from you: a WhatsApp number and a few seconds per bill. What it never does: guess a tax figure, save without approval, or file your return for you.