Paying company tax in Nepal is a legal obligation for all registered businesses. Whether you're running a small private company or a large enterprise, understanding the tax process is crucial for compliance and avoiding penalties. This article will guide you step-by-step on how to calculate, pay, and file company taxes in Nepal using both traditional and online methods.
What Is Company Tax?
Company tax refers to the income tax imposed on the profits of registered companies operating in Nepal. It is collected by the Inland Revenue Department (IRD) under the Ministry of Finance.
Who Needs to Pay Company Tax in Nepal?
All companies registered under the Company Act of Nepal—including private limited, public limited, and foreign companies—are required to file and pay taxes on their income.
Governing Laws and Regulatory Bodies
- Income Tax Act, 2058
- Value Added Tax Act, 2052
- Inland Revenue Department (IRD)
Types of Taxes Applicable to Companies in Nepal
Corporate Income Tax
This is the primary tax levied on the net profit of a company. The standard corporate tax rate in Nepal is:
- 25% for most companies
- 30% for banks, financial institutions, and telecom companies
- Lower rates may apply for businesses in priority sectors
Value Added Tax (VAT)
Companies with an annual turnover exceeding NPR 5 million must register for VAT and collect it on goods and services provided.
Tax Deducted at Source (TDS)
Companies must deduct TDS when making certain payments, such as salaries, rent, or contractor fees, and remit it to the IRD.
Excise Duty and Other Levies
Depending on the nature of your business, excise duty and other local taxes may also apply.
To learn if your business qualifies for any relief, refer to our dedicated blog post on Special Tax Exemptions in Nepal, which covers recent exemptions introduced in the Finance Bill 2082.
Step-by-Step Guide to Paying Company Tax in Nepal
Step 1: Calculate Taxable Income and Tax Liability
Prepare your financial statements, including income, expenses, and allowable deductions, to determine your taxable income. Apply the appropriate tax rate to compute the tax payable.
Step 2: Generate a Payment Voucher (PRN)
Log in to the IRD website using your company’s PAN credentials and generate a Payment Registration Number (PRN).
Step 3: Pay the Tax Through Authorized Banks or Online Platforms
You can pay company taxes using:
- Bank counter payment at authorized tax-collecting banks
- Online payment platforms like ConnectIPS, eSewa, or Khalti
Step 4: File the Tax Return with the Inland Revenue Department
After payment, submit your income tax return and supporting documents through the IRD’s online e-Filing system.
Online Tax Payment in Nepal
How to Use the IRD e-Payment Portal
- Visit taxpayer portal
- Log in with your PAN and password
- Fill the tax form and generate PRN
- Select online payment and complete the transaction
Paying Tax via ConnectIPS, eSewa, and Other Platforms
- Go to the tax payment section
- Enter your PRN and verify details
- Confirm payment using your bank or wallet balance
Benefits of Online Tax Payment
- Time-saving and convenient
- Real-time payment confirmation
- Secure and traceable
Required Documents for Company Tax Payment
- PAN Certificate
- Financial Statements (Profit & Loss, Balance Sheet)
- Tax Computation Sheet
- Audit Report (for companies with mandatory audit requirement)
If you don't have PAN certificate and don't know about how to get PAN certificate, we have detailed blog on How to Apply for a Tax Clearance Certificate?
Company Tax Filing Deadlines in Nepal
Annual Tax Return Filing Deadline
- Generally, within 3 months from the end of the fiscal year (i.e., by end of Ashwin for most companies)
Quarterly Advance Tax Payment Schedule
- First Installment: End of Poush
- Second Installment: End of Chaitra
- Third Installment: End of Ashadh
Penalties for Late Payment or Non-Compliance
- Interest on unpaid tax
- Heavy Fines on tax due
- Legal action and blacklisting
Common Challenges and Solutions in Paying Company Tax
Mistakes in Tax Computation
Use accounting software or hire professionals to avoid errors in income and expense reporting.
Issues with Online Payment Portals
Ensure a stable internet connection and verify payment details before submission.
How to Rectify Filing Errors
File a revised return within the allowed timeframe or consult your tax officer.
Tips for Smooth and Compliant Company Tax Filing
Maintain Accurate and Updated Records
Keep all transaction records, invoices, and bank statements organized throughout the year.
Seek Help from Tax Professionals
Chartered accountants and tax consultants can assist with compliance and optimization.
Stay Updated with IRD Notices and Changes
Regularly check the IRD website and budget announcements to stay informed about tax rates and laws.
Conclusion
Paying company tax in Nepal doesn’t have to be complicated. With proper record-keeping, online tools, and timely action, you can ensure smooth tax compliance and avoid unnecessary penalties. As the government pushes toward digitalization, taking advantage of online tax payment systems is both convenient and smart for your business growth.
If you have any queries regarding corporate tax payment, contact us for any kind of guidance. We are here for you!.