PAN Registration Mandatory for Ride Sharing Drivers in Nepal | IRD Notice 2083

The Inland Revenue Department (IRD) has clarified that individuals providing ride sharing services through registered ride sharing platforms must obtain a Permanent Account Number (PAN) before starting their business activities. This requirement is based on the Income Tax Act, 2058 and the Income Tax Rules, 2059, making PAN registration compulsory for eligible service providers.

If you provide transportation services through a ride sharing platform, obtaining a PAN is no longer optional—it is a legal obligation.

What Is the New PAN Requirement for Ride Sharing Service Providers in Nepal?

According to the notice issued by the Inland Revenue Department (IRD), any resident individual who provides services through a ride sharing operator's digital platform must obtain a Permanent Account Number (PAN) before providing ride sharing services.

The notice reminds taxpayers that anyone earning taxable income or required to deduct tax at source must first register with the tax authority and receive a PAN.

Legal Basis for Mandatory PAN Registration

The requirement is based on the following provisions:

Section 78 of the Income Tax Act, 2058

Section 78 requires individuals who intend to earn taxable income to obtain a Permanent Account Number (PAN) before commencing business or income-generating activities.

Rule 23 of the Income Tax Rules, 2059

Rule 23 further explains that any person:

• Intending to earn assessable income,

• Required by the Department to obtain a PAN, or

• Required to deduct tax at source,

must obtain a PAN before earning income or deducting tax.

These provisions now clearly apply to individuals offering ride sharing services through digital platforms.

Who Must Obtain a PAN?

The following individuals are required to obtain a PAN:

• Drivers providing services through ride sharing platforms

• Individuals earning taxable business income

• Persons required to deduct tax at source

• Individuals directed by the Inland Revenue Department to register

If you are associated with any ride sharing operator and receive payments for transportation services, you should obtain a PAN before starting operations.

\What Is a Ride Sharing Operator?

A ride sharing operator is a company or platform that connects passengers with drivers using a mobile application or digital platform.

The operator facilitates bookings, collects payments, and enables transportation services between customers and drivers.

Drivers working through such platforms are considered independent service providers and are responsible for complying with Nepal's tax laws.

Why Is PAN Registration Important?

Obtaining a PAN helps ensure tax compliance and allows the government to maintain accurate taxpayer records.

Benefits include:

• Legal compliance with the Income Tax Act

• Easier tax filing

• Better financial record keeping

• Eligibility for government and banking services

• Reduced risk of penalties for non-compliance

When Should Ride Sharing Drivers Apply for PAN?

Drivers should apply for a Permanent Account Number before:

• Accepting ride requests

• Receiving business income

• Providing transportation services through the platform

Waiting until after beginning operations may result in non-compliance with tax laws.

Documents Required for PAN Registration

Generally, applicants may need:

• Nepali Citizenship Certificate

• Mobile Number

• Email Address (if available)

• Passport-size photograph (if required)

• Personal details requested by the Inland Revenue Department

Requirements may vary depending on the registration method.

How to Register for a PAN in Nepal

The basic process includes:

1. Visit the Inland Revenue Office or use the online IRD system if available.

2. Complete the PAN registration application.

3. Submit the required identification documents.

4. Verify your personal information.

5. Receive your Permanent Account Number.

The process is generally simple and can often be completed within a short period.

Tax Compliance for Ride Sharing Service Providers

After obtaining a PAN, service providers should:

• Maintain records of income.

• File tax returns when required.

• Pay applicable income tax.

• Comply with tax deduction provisions where applicable.

• Keep financial records for future reference.

Proper bookkeeping helps avoid future tax complications.

Consequences of Operating Without a PAN

Failure to obtain a PAN before commencing taxable activities may result in:

• Violation of the Income Tax Act

• Difficulties during tax assessment

• Possible penalties under applicable tax laws

• Delays in receiving payments if platforms require PAN verification

• Compliance issues with the Inland Revenue Department

Obtaining a PAN early helps avoid these risks.

Frequently Asked Questions (FAQs)

Is PAN mandatory for ride sharing drivers in Nepal?

Yes. According to the latest IRD notice, resident individuals providing ride sharing services through registered platforms must obtain a PAN before starting business activities.

Which law makes PAN mandatory?

The requirement is based on Section 78 of the Income Tax Act, 2058 and Rule 23 of the Income Tax Rules, 2059.

Do all ride sharing service providers need a PAN?

Yes, if they provide services through a ride sharing operator's platform and earn taxable income.

Can I register for PAN after starting ride sharing services?

The law requires PAN registration before earning taxable income or commencing business activities.

Is PAN registration free?

PAN registration is generally provided by the Inland Revenue Department without a registration fee.

Need Help Registering Your PAN?

If you are planning to work as a ride sharing service provider or need assistance with PAN registration, tax compliance, bookkeeping, or income tax filing in Nepal, Estartup Nepal can help you complete the process quickly and ensure full compliance with IRD regulations.

Our experts assist individuals, freelancers, startups, and businesses with hassle-free tax registration and ongoing compliance services.

Conclusion

The Inland Revenue Department has made it clear that PAN registration is mandatory for individuals providing ride sharing services through digital platforms. This requirement is intended to improve tax compliance and ensure that service providers operate legally under Nepal's tax laws.

If you are planning to work with a ride sharing platform, obtaining your PAN should be your first step before accepting rides or earning income. Staying compliant today will help you avoid legal issues and build a more sustainable business in the future.