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Nepal 13% VAT on foreign digital services July 2022

VAT on foreign providers of digital services to consumers

The Nepalese Ministry of Finance has confirmed that non-resident providers of digital or electronic, broadcast and telephony services must register for VAT and charge local consumers at the standard rate of 13%. There is an annual VAT registration threshold of 2 million (approx. $15,800).

This applies from July 2022.

In addition, Nepal has imposed a 2% Digital Services Tax on the revenues of such foreign providers and facilitating marketplaces.

Check our global VAT on digital services tracker to follow all countries’ obligations around the world.

Determining if VAT due

To determine if Nepalese VAT is due, the provider must confirm consumption took place there and may rely of the following pieces of evidence to reason this:

  1. Consumer’s billing address
  2. Debit or credit card address
  3. IP address
  4. SIM or dialling code

What services are liable to VAT?

Income from the following services are subject to Nepalese VAT according to the Inland Revenue Department

  • Advertisements
  • Streaming, download or broadcast TV, films and music
  • Data storage
  • Cloud-based services
  • Online gaming
  • Mobile telephony
  • Online marketplace services
  • Software
  • Online data, images and similar

VAT compliance issues

  • There is a VAT registration threshold of 2 million (approx. $15,800).  Although voluntary registration is also available.
  • Tax invoices are optional
  • VAT returns are monthly, and are due by the 25th of the following month.

Compiling global VAT or GST returns is complex, time consuming and fraught with tax liability risks.  VAT Calc’s single platform VAT Filer can accurately complete any country filings with verified transactional data from our VAT Calculator or VAT Auditor integrated tools.

Asia Pacific VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Australia 10% Jul 2017 AUD $75,000
Azerbaijan 12% Jan 2017
Armenia 20% Jan 2022 AMD 115million
Bangladesh 5% - 15% Jul 2019 B2B and B2C
Bhutan 7% Jul 2021 Nu 5million
Cambodia 10% Mar 2022 KHR 250m
China 6%-13% N/a Nil Withholding VAT; B2B and B2C
Fiji 9% TBC FJD 300,000
India 18% Jul 2017 -
Indonesia 11% Aug 2020 IDR600m or 12k customers
Japan 10% Oct 2015 JPY 10 million
Kazakhstan 12% Jan 2022 Nil
Kyrgyzstan 12% Jan 2022 Nil
Laos 7% Feb 2022 LAK 400m
Malaysia 6% Jan 2020 RM500,000
Nepal 13% Jul 2022 Rupees 2m Also 2% DST
New Zealand 15% Oct 2016 NZD 60,000
Pakistan 2% Sep 2021 Nil Marketplace Withholding VAT
Philippines 12% TBC P 3million
Singapore 7% Jan 2020 S$ 100,000
South Korea 10% Jul 2015 Nil
Taiwan 5% May 2017 NTD 480,000
Tajikistan 18% Jan 2021
Thailand 7% Sep 2021 1.8m Baht
Uzbekistan 15% Jan 2020 Nil
Vietnam 10% Dec 2020

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