Nepal

Invoicing and electronic documents

Legal guide

• VAT · tax invoices

  Mandatory for registered persons

  Every registered person must issue an invoice to the recipient for each supply of goods or services, except in prescribed cases, and the recipient has a duty to obtain it (VAT Act section 14). VAT is charged at a single rate of 13% (section 7). An unregistered person may not issue a document showing VAT collected (section 15). Fines are NPR 10,000 for each invoice not issued, NPR 1,000 for each invoice not taken, and NPR 500,000 for using billing software that can delete or correct data (section 29).

  Official source: Inland Revenue Department · The Value-Added Tax Act, 1996 (2052), English translation as amended to the Financial Act, 2021 (PDF)

• VAT · invoice content

  Prescribed format

  Under VAT Rules rule 17, the tax invoice follows the format in Schedules 5 and 5A, is clearly marked "tax invoice" (कर बीजक) on its face, and states the kind, size, model and brand of goods, with at least the first four digits of the harmonised code for imported goods. Three copies are made, one for the buyer, one kept for the tax office on request and one for the seller's own records. Retailers may be allowed to issue an abbreviated tax invoice (rule 18), but not for a transaction above NPR 10,000, and a buyer can't claim input tax on one. Records must be kept for six years (rule 23).

  Official source: Inland Revenue Department · Value Added Tax Rules, 2053, with the 27th amendment (Nepali, PDF)

• VAT · registration thresholds

  Turnover-based

  Under VAT Rules rule 6, a person whose turnover in the past twelve months is up to NPR 5 million (goods, and transport vehicle hire or transport services) or up to NPR 3 million (services, or mixed goods and services) need not register. Registration is required within 30 days of exceeding those amounts (rule 7). Apart from traders in exempt supplies importing for their own use, anyone importing taxable goods worth more than NPR 10,000 at one time must register.

  Official source: Inland Revenue Department · Value Added Tax Rules, 2053, with the 27th amendment (Nepali, PDF)

• Electronic billing · approval

  Prior IRD approval required

  A taxpayer may issue electronic invoices only with the department's prior approval (VAT Act section 14A). Under the Electronic Invoice Procedure, 2074 (in force from 2074/09/16 in the Bikram Sambat calendar, amended four times), software and devices must first be enlisted by the producer or authorised distributor, and the user then applies to its tax office for a permit. Software must use an SQL database, prevent deletion of entered data, keep an audit log, number invoices sequentially per fiscal year, print each original only once and mark reprints "Copy of Original". Cloud billing servers must be in Nepal and accessible to the IRD; multinationals using servers abroad must keep a real-time audit log server in Nepal.

  Official source: Inland Revenue Department · Electronic Invoice Procedure, 2074, with the fourth amendment (Nepali, PDF)

• Electronic billing · mandatory groups

  Mandatory for taxpayers specified by IRD notice

  IRD notices dated 2079/02/20 and 2079/08/07 (Bikram Sambat) require electronic or computer billing from these groups. From 2075/11/29, hotels, restaurants, eateries (चमेना गृह) and internet service providers above NPR 50 million a year, department stores, marts and flooring and furnishing traders above NPR 100 million, and cinema halls in Kathmandu Valley linked to the box-office system. From 2079/04/01, any taxpayer with turnover above NPR 100 million in fiscal year 2077/78 or 2078/79, excluding banks and financial institutions that don't invoice consumers directly, and all box-office-linked cinema halls. From 2079/10/01, producers of liquor, beer, wine and spirits, cigarettes and gutkha, and tobacco-product industries above NPR 50 million. Other taxpayers may bill electronically by choice with approval.

  Official source: Inland Revenue Department · urgent notice on mandatory e-billing, 2079/08/07 BS (Nepali, PDF)

• Electronic billing · CBMS link

  Required above NPR 200 million turnover

  An IRD notice dated 2083/01/03 (Bikram Sambat) states the department decided on 2082/12/27 that all taxpayers with annual turnover above NPR 200 million must issue invoices electronically and link them to CBMS at the time of issue. Banks and financial institutions that don't invoice consumers directly are excluded. The notice gives no start date. Users of cloud-based billing must also send data to CBMS in real time under the procedure.

  Official source: Inland Revenue Department · notice on electronic invoices and CBMS, 2083/01/03 BS (Nepali)

• Electronic billing · returns

  Electronic purchase and sales details

  Taxpayers approved for electronic invoicing, and others the department specifies, must file their purchase and sales book details electronically in the department's format with each VAT return (VAT Rules rule 25). The IRD may also have continuous access to a taxpayer's database (VAT Act section 16(1a)).

  Official source: Inland Revenue Department · Value Added Tax Rules, 2053, with the 27th amendment (Nepali, PDF)

• Invoice issuance · enforcement

  Monitored

  An IRD notice reminds sellers that rule 17 of the VAT Rules requires an invoice for every supply and that tax officers' market monitoring will act on failures to issue bills.

  Official source: Inland Revenue Department · notice on issuing bills and invoices (Nepali, PDF)

• B2G and B2B · structured e-invoice exchange

  No e-invoicing obligation found in the sources reviewed

  The IRD's VAT Act, VAT Rules, Electronic Invoice Procedure and notices govern how invoices are issued and monitored. None of them requires invoices to be delivered to buyers in a structured format or through a network such as Peppol.

  Official source: Inland Revenue Department · Electronic Invoice Procedure, 2074, with the fourth amendment (Nepali, PDF)

Timeline

1. 20 March 1996

   Value-Added Tax Act, 1996 (2052) published

   Date of royal seal and publication of the Act that requires registered persons to issue invoices.

   Official source: Inland Revenue Department · The Value-Added Tax Act, 1996 (2052), English translation as amended to the Financial Act, 2021 (PDF)
2. 16 November 1997

   VAT comes into force

   The VAT Act came into force on this date under a Nepal Gazette notification dated 1 August 1997.

   Official source: Inland Revenue Department · The Value-Added Tax Act, 1996 (2052), English translation as amended to the Financial Act, 2021 (PDF)
3. 16 July 2018

   Financial Act, 2018 adds electronic invoicing to the VAT Act

   Date of authentication and publication of the Financial Act, 2018. It inserted section 14A, which allows electronic invoices with IRD approval and lets the IRD require specified taxpayers to bill electronically and link to CBMS. It also added IRD database access and fines for billing software that can delete or correct data.

   Official source: Inland Revenue Department · The Value-Added Tax Act, 1996 (2052), English translation as amended to the Financial Act, 2021 (PDF)

Peppol in Nepal

Directory participants

1

Document families

2

Peppol Authority: OpenPeppol.

Documents on Peppol

• Credit Note
  1 participant
• Invoice
  1 participant

Registrations over time

Registration dates in the current Directory snapshot.

Participants