Understanding Nepal VAT Registration Triggers and Thresholds
Updated 2 months ago
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Knowing when you are required to register for VAT in Nepal is essential to staying compliant. This article covers the registration triggers and thresholds for both resident and non-resident businesses.
Registration Trigger: Revenue Threshold
Nepal uses a revenue-based threshold to determine when VAT registration is required. There is no transaction count threshold — only revenue matters.
When you cross the applicable threshold, you have an immediate obligation to register within 30 days. VAT must be charged starting from your registration date.
Thresholds at a Glance
Business Type | Threshold | Measurement Period |
|---|---|---|
Nepal-based business (goods only) | NPR 5,000,000 (NPR 5 million) | Rolling 12 months |
Nepal-based business (services or mixed goods and services) | NPR 3,000,000 (NPR 3 million) | Rolling 12 months |
Non-resident providing digital services (SaaS) | NPR 3,000,000 (NPR 3 million) | Rolling 12 months |
Note: NPR stands for Nepalese Rupee.
What Counts Toward the Threshold?
Item | Resident Business | Non-Resident (SaaS) |
|---|---|---|
B2B sales | Yes | No (reverse charge applies) |
B2C sales | Yes | Yes |
Zero-rated supplies (e.g., exports) | Yes | Yes (if applicable) |
Exempt supplies | No | No |
Marketplace-facilitated sales | Yes | Yes (if not all through marketplace) |
Refunded or credited sales | Deducted (net turnover used) | Deducted (net turnover used) |
Physical Nexus: When Physical Presence Triggers Registration
If your business has a physical presence in Nepal, registration is still only required once you exceed the revenue threshold. Mere physical presence alone does not create an immediate registration obligation, with one exception:
If you have a permanent establishment (PE) in Nepal (such as a branch office or fixed place of business), you are required to register under the standard VAT rules once you cross the threshold.
Non-sales remote employees (such as remote developers with no authority to make sales) do not trigger a registration obligation on their own.
A passive server or equipment used solely for data storage does not trigger registration, as long as it is not directly involved in revenue-generating activities.
Economic Nexus for Non-Resident SaaS Businesses
Nepal's digital services VAT rules for non-residents became effective in 2023. As a non-resident SaaS seller, the key rules are:
The threshold is NPR 3,000,000 in digital services revenue from Nepalese customers (B2C and B2B combined) within a rolling 12-month period.
Only your Nepal-specific revenue counts — global revenue is not included.
Once you cross the threshold, you must register within 30 days.
There is no forward-looking test. The measurement is based on actual past sales.
Small Business Exemption
Businesses that remain below the applicable threshold are not required to register for VAT, charge VAT, or file VAT returns. No VAT is collected, and no input credits can be claimed.
Business Type | Exemption Threshold |
|---|---|
Goods (resident) | Below NPR 50 lakh (NPR 5 million) |
Services or mixed (resident) | Below NPR 30 lakh (NPR 3 million) |
Non-resident digital services | Below NPR 30 lakh (NPR 3 million) |
Marketplace Rules
Nepal currently does not have marketplace facilitator or deemed supplier rules as of March 2026. Individual sellers remain responsible for their own VAT obligations, even when selling through a marketplace platform.
Important: Once your Nepal revenue crosses the NPR 3,000,000 threshold, you must act within 30 days. Delaying registration can result in penalties. Kintsugi tracks your exposure and can alert you when you are approaching the threshold.
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