Corporate Income Tax in Nepal — FY 2082/83 Guide

Corporate tax in Nepal isn't a single flat number — it varies by industry, company size, and location, and companies that assume the "standard rate" applies across the board sometimes end up over- or under-paying without realizing it. This guide covers the corporate tax rate structure for FY 2082/83 (2025/26), the filing deadline and extension process, the advance tax installment schedule companies must follow, the deductions most commonly available to businesses, and what happens if a corporate filing is late. As with any tax guide, note that FY 2082/83 has now closed and FY 2083/84 is underway with its own Finance Act changes — the figures below reflect the FY 2082/83 framework specifically, and companies should confirm the current year's applicable rates with a Chartered Accountant before filing.

Corporate Tax Rate Table by Industry (FY 2082/83)

Nepal's corporate tax rate depends heavily on the nature of the business, with several distinct categories:

Category	Approximate Rate
General/standard company	25%
Banks, financial institutions, insurance companies	30%
Telecom, tobacco, and alcohol businesses	30%
Qualifying IT companies	Reduced rate (around 15%), subject to conditions
Qualifying SMEs (within prescribed turnover limits)	Reduced rate (around 15%), subject to conditions
Special industries (e.g. certain manufacturing) qualifying under Section 11	Rebate off the standard rate, subject to conditions
Hydropower, export-oriented, and SEZ-based industries	Concessional/exemption periods, subject to specific conditions

These figures are approximate categories rather than a substitute for checking your company's exact classification — many concessional rates come with specific eligibility conditions (turnover caps, sector-specific requirements, location requirements for remote-area rebates), and a company should confirm precisely which category and rate applies to it with a Chartered Accountant rather than assuming based on a general industry label alone.

Filing Deadline and the Extension Rule

Companies are generally required to file their annual income tax return within approximately three months of their fiscal year-end, once the statutory audit and any required board/AGM approval of the financial statements have been completed. Where a company genuinely cannot meet this deadline — commonly due to delays in completing the audit or convening the AGM — a formal extension request can be submitted to the tax office before the original deadline passes, explaining the reason for the delay. Extensions are granted at the tax office's discretion based on the circumstances presented, and should not be assumed automatic; requesting one as early as a delay becomes apparent gives the strongest chance of approval.

Advance Tax Installment Schedule for Companies

Companies with an estimated annual tax liability above the advance tax threshold are required to pay tax in three installments during the fiscal year, rather than as a single lump sum at year-end: a first installment by the end of Poush (mid-January), a second cumulative installment by the end of Chaitra (mid-April), and the third and final installment completing the full estimated liability by the end of Ashad (mid-July), which coincides with the fiscal year-end itself. Companies should base these installments on a reasonable estimate of the year's total tax liability, since a significant underestimate can itself attract interest on the shortfall once the final position is reconciled through the annual return.

Common Deductions Available to Businesses

Companies computing tax under normal computation can generally claim a range of legitimate business deductions against gross income, including ordinary operating expenses such as rent, utilities, and staff salaries; depreciation on business assets, calculated according to the prescribed asset pools and rates; interest on business borrowings, subject to applicable limitations; and specific incentive-linked deductions available for qualifying investments in areas like research and development, employee training, or specified priority sectors. Properly documenting each deduction with invoices, contracts, and payment records is essential, since these are exactly the figures a statutory audit and any subsequent tax review will scrutinize most closely.

Penalty for Late Corporate Filing

Corporate late filing penalties are typically calculated with reference to factors specific to the company's scale — such as turnover or the tax amount involved — rather than a simple fixed fee, meaning the absolute cost of a late corporate filing can be considerably higher than an individual's equivalent delay. On top of the late filing fee, interest continues to accrue on any unpaid tax from the original due date until payment, so the practical advice remains the same as for any late filing: file and pay as promptly as possible once a deadline has been missed, rather than allowing the delay to extend further.

Frequently Asked Questions

What is the tax rate for a private company in Nepal?
For FY 2082/83, a general private limited company that doesn't fall into one of the specifically higher-taxed or concessional-rate categories is generally taxed at the standard corporate rate of 25% on its taxable income. This is the default rate that applies to the majority of ordinary trading, service, and general business companies operating in Nepal, and it's the figure most newly incorporated private companies should plan around unless their specific activity places them into one of the distinct categories discussed above. If the company operates in banking, financial services, insurance, telecommunications, tobacco, or alcohol, the applicable rate rises to 30% instead, reflecting the higher-rate treatment specifically assigned to these sectors. Conversely, if the company qualifies as a genuine information technology business meeting the relevant conditions, or as a small or medium enterprise within the prescribed turnover limits, it may be eligible for a reduced rate around 15%, and certain special industries — particularly in manufacturing and other priority sectors — may qualify for a rebate off the standard 25% rate under the specific incentive provisions available to them, subject to meeting the conditions attached to that concession. Given how much the applicable rate can shift based on a company's precise classification, and given that rates, thresholds, and available concessions are reviewed and can change with each year's Finance Act, a private company should not assume "25% because we're a private limited company" is automatically correct without first confirming whether it might actually qualify for one of the higher or lower-rate categories based on its actual business activity, turnover, and sector — this confirmation is best done with a Chartered Accountant familiar with the current year's specific provisions rather than relying on a general rule of thumb.

Do dividends paid by a company get taxed again in the hands of shareholders?
Dividend distributions are generally subject to their own separate withholding tax treatment at the point of distribution to shareholders, distinct from the corporate income tax already paid by the company on its profits. This is a separate tax layer worth understanding specifically if your company plans to distribute profits as dividends, rather than assuming corporate tax paid at the company level is the only tax involved.

Can a newly incorporated company choose which fiscal year to start its first accounting period from?
A newly incorporated company generally follows the standard fiscal year applicable in Nepal from its date of incorporation for its first accounting period, with its first return typically covering the period from incorporation to the nearest fiscal year-end, which may be a shorter-than-twelve-month period for the first year.

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Disclaimer: This article is for general information only and does not constitute legal or tax advice. Tax rates, thresholds, and deadlines are reviewed and can change with each year's Finance Act, and their application depends on your specific facts and circumstances. Please consult an ICAN-registered Chartered Accountant to confirm the rates and deadlines currently applicable to your company.