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Nepal

Taxes

If you want to start a business in Nepal, this article explains the tax laws for a LLC, which is the most common company type in Nepal.

Nepal's resident companies are liable to tax on their worldwide income. The usual tax rate for offshore income, from our research, and these things do change, is 25%. The country may not have exemptions to bring in foreign earned profits. Corporate Income Tax standard rate is 25%. Income from certain activities may be taxed at different rates, as manufacturing (20%) or financial, petroleum and tobacco (30%). Nepal ranks 103rd when compared to corporate tax rate worldwide.

The valued added tax rate is 13.00%, that ranks Nepal as 73rd overall in terms of value added tax rate worldwide. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 84hours. Contributing to this is the number of yearly labor tax payments, which is 11 in NP.

Thin capitalization mandates are enacted. Thin capitalisation refers to any sort of requirements on given company with respect todebt-to-asset ratios. Distribution of dividends by a resident company is taxed on source at a withholding tax of 5%, which is a final tax. Dividends received from a foreign entity may be subject to corporate income tax. Dividends are distributions of earnings of the business, decided by the board, to shareholders. Dividends can be issued as shares of stock, cash payments, or other property. Capital Gains are included in corporate income tax base. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

Dividends paid to non-resident companies are subject to a withholding tax of 5%. Payments on royalties and interests to non residents are subject to a withholding tax rate of 15%.

There is no known tax on wealth in Nepal. There are real property and inheritance taxes in Nepal. There are popular and well known research and development tax relief in this country.

The above is not tax or legal advice for your specific situation. We can to refer you to a lawyer in Nepal who can answer all your questions. Ready to get started? Click incorporate now if you are in a hurry, or press the free consultation button above.

Country details

Nepal
NPR
Kathmandu
Asia
ne, English
28,951,852

Tax treaties

Country Type Date Signed
Korea, Republic of DTC  2001-10-05
Norway DTC  1996-05-13
China DTC  2001-05-14
Austria DTC  2000-12-15
Pakistan DTC  2001-01-25
Qatar DTC  2007-10-15
India DTC  2011-11-27
Mauritius DTC  1999-08-03

Tax treaties Map

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