Nepal VAT Calculator

Removing VAT is a division, not a subtraction

To get the net from a VAT-inclusive price you divide by 1.13. Subtracting 13% of the inclusive amount gives a different, smaller number and understates the net by about 1.7%.

On Rs 1,130 inclusive, the correct net is Rs 1,000 and the VAT is Rs 130. Subtracting 13% would wrongly give Rs 983.10 — an error of nearly Rs 17 on every thousand rupees, which compounds across a ledger.

13% or 5%

13% is the standard rate and did not change in the FY 2083/84 budget. The Economic Act 2083 added a 5% rate for two supplies: ride-sharing services sold through a registered platform, and electricity supplied to end users. It also lets the government set further rates by notice in the Nepal Gazette, capped at 13%. Everything else stays at 13% unless it is exempt or zero-rated.

Do you actually have to register?

Two thresholds, and using the wrong one is the commonest mistake because most guides quote only the first:

• Goods only — Rs 5,000,000 of annual turnover.
• Services only, or goods and services together — Rs 3,000,000.

If you sell any services at all alongside goods, the lower Rs 3 million threshold is the one that applies to you. A shop that adds a repair or installation service has moved thresholds without changing anything it sells.

The twelve months are measured on a rolling basis, not against the fiscal year, and you have 30 days from crossing to register. Some categories must register regardless of turnover.

Exempt is not zero-rated, and the difference is money

Both mean you charge no VAT to the customer. Only one lets you reclaim the VAT you paid on your own purchases.

	Schedule 1 — exempt	Schedule 2 — zero-rated
VAT charged to customer	None	0%
Input VAT you can reclaim	None	All of it
Typical	Basic agriculture, medicine and medical services, education, passenger transport	Exports

So an exporter under Schedule 2 recovers the VAT embedded in its inputs, which is the whole point — it stops Nepali VAT being exported inside the price. A business dealing only in Schedule 1 items cannot reclaim anything, and is not required to register at all.

Treating an exempt supply as zero-rated means claiming input credit you are not entitled to. It is not a rounding error; it is a reclaim that gets disallowed.

Filing, and what late costs

VAT returns are monthly, due by the 25th of the following Nepali month, filed through the Inland Revenue Department portal at ird.gov.np. A nil return is still a return.

• Late return: 0.05% of monthly turnover, or Rs 1,000 — whichever is higher. On a small month the flat Rs 1,000 bites; on a large one the percentage does.
• Late payment: interest at 15% per annum, calculated daily.
• Four months past due: the IRD has said it may restrict import and export activity — which for a trading business is not a fine, it is a stop.

Sources

• Value Added Tax Act 2052, Schedule 1 — exempt goods and services.
• Value Added Tax Act 2052, Schedule 2 — zero-rated goods and services.
• Inland Revenue Department — registration, filing and the portal itself.
• ICAN, Highlights of the Federal Budget FY 2083/84, pp. 36–37 — the Economic Act 2083's amendments to the VAT Act, including the 5% rate in s.7(1 kha).

Standard rate 13% under the VAT Act 2052, with the 5% rate added by the Economic Act 2083. Checked on 24 September 2026 against the FY 2083/84 amendments in ICAN's budget highlights: the 13% rate and the registration thresholds did not change, and the general fine for other breaches of the Act (s.29(1)(ta)) rose from Rs 1,000 to Rs 10,000. The late-return fee above is not among the amendments. Rules change with each budget — confirm against the IRD before relying on a figure. An estimate for planning, not advice. The calculation runs on your device; nothing is uploaded.