The tax registration process and the decision whether to register a business under PAN or VAT can be quite confusing for many entrepreneurs. Especially, entrepreneurs with ideas relating to alcohol distribution, export and import, handicrafts often seem to have queries on requirements for registration. Based on such queries received from various aspiring entrepreneurs this blog attempts to provide basic details on the tax registration system of Nepal.
All businesses in Nepal are required to obtain a PAN registration certificate from Inland Revenue Office (IRO) before coming into operation. The law of Nepal mandates PAN registration, therefore, it is crucial to understand PAN and the process of obtaining PAN.
PAN (Permanent Account Number) is a unique identification number issued to all taxpayers and tax deducted at source (TDS) withholding agents throughout Nepal. The one time allotted PAN of a taxpayer or TDS withholding agent never changes.
As per the law, the kinds of companies and organizations which have to obtain a PAN certificate as a mandate are:
The process to apply for the registration of PAN begins with either collecting application form for registration from respective Inland Revenue Office (IRO) or downloading the forms from the link provided in the website of Inland Revenue Department (IRD). Then the application form must be filled and submitted at the concerned Office of Inland Revenue.
The documents required to be submitted at Office of Inland Revenue includes:
Note: And case where an individual desires to register his partnership firm, limited company, corporation or any other organization through a representative, the authority must be given through a signed Power of Attorney (POA) form to the representative. The signed POA must be presented before the tax officer at IRO along with the submission of the application for PAN registration. The representative must also produce his/her citizenship card.
VAT registration is also as important as PAN registration to understand prior to a business coming into operation.
VAT (Value Added Tax) is a broad-based tax that covers the value added to each commodity by an organization/ firm at all stages of production and distribution. The VAT registration certificate is provided by the Inland Revenue Office (IRO) subsequent to VAT registration. VAT registration is denoted in the PAN certificate itself and separate certificate is not provided.
Any individual engaged in any taxable transaction must submit an application for registration in the prescribed form before IRO. However, there are few thresholds, not exceeding which, does not require VAT registration.
Subsequent to VAT registration there are statutory requirements a VAT registrant must fulfill in accordance to law. They are:
For further details regarding PAN and VAT registration please visit the Inland Revenue Department Website or consult a Tax Consultant.
If you require help in Business Registration then visit our blog on Registering Business in Nepal here.
Amount paid to VAT while registration of company
If I have Vat attracted Sales of 20 lacs and Vat exempt sales of 60 Lacs in 2073-74, Do I need to register for VAT in 2074-75?
I was previously doing a job and I have a personal PAN card. Now I have started my own company. What is the process to get the card converted from a personal one to a company one?
Company is also considered as artificial person. Hence it has its own identity. Separate Pan should be obtain for company. if business is of proprietorship than same personal pan can be used
Hi..I have thangka company registered in cottage and small industry in 2069 bs. Do i need to register it in nagarpalika office? Also can u tell me process to renew it?
yes u need it i heard old business should pay to nagarpalika as well.
Iwant to do international ecommerce, like amazone. do i need to register for PAN and VAT both
Yes same as in nepal
how much deducted service charge of Pan and vat ?
I am from India, and my company (registered in India) wants to provide some services to a Nepalese company. How do I pay VAT in such cases? Do I need my company to be registered there? Kindly assist.
(Please assume that my services will cost more than 1 Crore Nepalese Rupees)
I try to open a book store in 2065 and got the PAN number too. But I could not mange budget for it so could not open it. I submitted letter to cancel my PAN number too. The concerned officer (sachib) was not in the office so the other officer told me to leave the document on the table, he would look into it. believing him, I left the document on his table and thought that it was cancelled. I did not give a second thought because I did not even open the store. now, I came to know that it is still in active status. If so then I am done. I need to pay a huge sum of money as a tax which is not fair. What should I do? I am a lower middle class woman. I can’t think of paying such a huge amount for the things I have not even started. Any suggestion for me?
my company have same vat and pan number so did it will make any difference while paying tax
how can i get personal pan card in kathmandu if i am the permanent citizen of outside the valley?
I want to start an online stire in social sites. Do i need to register for PAN or VAT?
Sir i want to know if PAN or VAT plate is not hanging then how much compensation will charge and what kind of color of VAT plate ?
Hi ! Is PAN cumpulsary for all personnel, whether He or She is in tax bracket or not ?
Do i have to addit company? I did for pan.