Understanding Nepal Tax Jurisdictions

If you sell digital services or SaaS products to customers in Nepal, it helps to understand how the tax jurisdiction structure works before you register or start collecting.

There Is Only One Jurisdiction: Federal

Unlike the United States, Nepal has a single, federal-level tax jurisdiction for VAT. There are no state, provincial, or local VAT obligations. This means:

• You only register once with the Inland Revenue Department (IRD) in Nepal.

• All VAT obligations — including registration, filing, payment, and compliance — are handled at the federal level.

• There are no special tax rate regions within Nepal.

How Kintsugi Uses Address Jurisdictions

Within Kintsugi, the address jurisdiction for Nepal is simply listed as Nepal. When a transaction is tagged to a Nepal address, the system applies the federal VAT rules accordingly.

For a transaction to be subject to Nepal VAT, the customer's address must include "Nepal" as the country. Because VAT is applied at the federal level, no regional or local address components are needed to determine taxability — just the country designation.

Example Nepal Address Format

What "Place of Supply" Means for Digital Services

For non-resident digital service providers, Nepal's tax law defines a transaction as taking place in Nepal if any one of the following conditions is met:

• The service is delivered within Nepal

• The invoice is issued to a Nepal address

• Payment is made from a Nepalese bank account or authorized payment provider

• Payment is made through a debit or credit card issued by a Nepalese bank

• The service is accessed using an IP address located in Nepal

• The service is accessed using a SIM card with a Nepal country code or a Nepali landline

This is important for SaaS businesses to understand. Even if your business has no physical presence in Nepal, you may still have a tax obligation if your customers meet any of the above criteria.

Tip: Because Nepal has only a federal tax jurisdiction, compliance is simpler than in multi-jurisdictional countries. One registration covers all of your Nepal VAT obligations.

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