Value Added Tax (VAT) is levied on the supply of most goods and services in Nepal. Understanding when registration is required — and what it entails afterward — helps a business plan ahead rather than react to a compliance notice.
Who typically needs to register
Registration requirements generally depend on the nature of the business and its annual transaction threshold, as set out under the VAT Act and periodically updated by the IRD. Certain categories of business (such as those dealing in specific goods or services, or operating in specific forms) may be required to register regardless of turnover. Because thresholds and categories are revised from time to time, it’s worth confirming current requirements before assuming a business falls outside the registration net.
The registration process, broadly
In general terms, VAT registration involves submitting an application to the relevant IRD office along with supporting documents such as business registration certificates, PAN details, and proof of business premises. Once registered, a VAT registration certificate is issued, and the business is expected to display it at its place of business.
Obligations after registration
Once VAT-registered, a business is generally expected to:
- Issue VAT invoices for taxable supplies
- Maintain purchase and sales registers
- File monthly VAT returns, along with payment of any net VAT due
- Retain records for the period required under law
A general note
VAT rules, thresholds, and exemptions change periodically. This overview reflects the general framework rather than a complete or current statement of the law.
This article is for general informational purposes only and does not constitute professional advice. Please consult a qualified professional for guidance specific to your circumstances.