Nepal Tax Rates
Nepal operates a progressive income tax system with rates from 1% to 36%, administered by the Inland Revenue Department. The standard corporate tax rate is 25%, and VAT is 13%. Nepal's tax system has been evolving with support from international development partners to broaden the tax base and improve compliance.
Top Income Tax Rate
36%
Corporate Tax Rate
25%
VAT / Sales Tax
13%
Capital Gains Tax
10%
Detailed Tax Information
Income Tax Brackets
Nepal's personal income tax applies progressive rates from 1% to 36%. A social security tax of 1% applies on the first NPR 500,000 of income. Residents are taxed on worldwide income. Single individuals and married couples have different bracket thresholds (couples receive wider brackets). An additional 20% surcharge applies to income exceeding NPR 5 million.
| Income Range | Tax Rate |
|---|---|
| Rs 0 – Rs 500K | 1% |
| Rs 500K – Rs 700K | 10% |
| Rs 700K – Rs 1.0M | 20% |
| Rs 1.0M – Rs 2.0M | 30% |
| Rs 2.0M+ | 36% |
Corporate Tax
Nepal's standard corporate income tax rate is 25%. Banks and financial institutions pay 30%. Special industries, export-based industries, and companies in Special Economic Zones may benefit from reduced rates of 20%. A 10-year tax holiday may apply for certain infrastructure projects.
Standard Rate
25%
Capital Gains Tax
Capital gains on the disposal of assets are taxed at 10% for individuals and 10% for companies on gains from the sale of shares and immovable property. Listed share gains may face a 5% rate depending on the holding period.
Rate
10%
VAT / Sales Tax
Nepal's VAT is levied at 13% on the supply of most goods and services. Exempt supplies include basic food items, agricultural products, education, healthcare, and financial services.
Standard Rate
13%
Cryptocurrency Tax
Cryptocurrency trading is illegal in Nepal. The Nepal Rastra Bank has prohibited the use and trading of cryptocurrencies. There is no tax framework for crypto as it is not a legal activity.
Tax Treaties
Nepal has approximately 12 double taxation agreements, primarily with South Asian neighbors and key trading partners.
Treaty Network
12
Double taxation agreements
Major treaty partners:
Key Details
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Tax in United States
$24K
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$12K
12% effective
You Save
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less tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
