Every VAT-registered business in Nepal, from a Thamel restaurant to a Kathmandu IT consultancy, must file a return by the 25th of every Nepali month, whether or not there was any business activity. This guide walks through the exact filing process on the IRD Taxpayer Portal, the documents you need, how net VAT is calculated, and the mistakes that trip up first-time filers.
Key takeaways
- VAT returns are filed monthly, by the 25th of the following Nepali month, through the IRD Taxpayer Portal (taxpayerportal.ird.gov.np).
- The standard VAT rate is 13%. You pay the difference between output VAT (on sales) and input VAT (on purchases).
- A return is required even with zero transactions - this is called a nil return.
- Payment can be made through ConnectIPS, bank e-payment, or an authorised bank counter using a payment voucher generated on the portal.
- Small taxpayers in specified sectors may apply for trimester (four-monthly) filing instead of monthly filing.
Who needs to file a VAT return
Any business or professional registered for VAT under the Value Added Tax Act 2052 must file a periodic return, regardless of turnover in that particular period. This includes businesses that crossed the mandatory registration threshold (annual turnover above NPR 50 lakh for goods, or NPR 30 lakh for services), businesses in a mandatory-registration category regardless of turnover, and anyone who registered voluntarily under Section 9 to claim input VAT credit. If your PAN has the VAT flag active on the IRD system, you are required to file - there is no threshold below which filing becomes optional.
Documents and records to gather before you start
Filing is quick if your books are in order and slow and error-prone if they are not. Before logging into the portal, assemble the following for the tax period you are filing:
Pre-filing checklist
- Sales register or e-billing summary for the period, with total taxable and exempt sales separated
- Purchase register with supplier VAT invoices, each showing a valid VAT registration number
- Import documents and customs assessment notices, if applicable, since import VAT is claimable as input tax
- Any debit or credit notes issued or received during the period
- Previous month's return acknowledgement, to carry forward any unused input VAT credit
- Your PAN, VAT registration certificate, and portal login credentials
The step-by-step VAT filing process
- Reconcile your sales and purchase booksTotal your taxable sales, exempt sales, and zero-rated sales separately for the month. Do the same for purchases, separating VAT-bearing purchases from exempt ones. Any mismatch here is the most common source of filing errors.
- Log in to the IRD Taxpayer PortalGo to taxpayerportal.ird.gov.np and sign in with your PAN and password. First-time users need to complete portal registration linked to their VAT certificate before they can file.
- Select the correct tax periodChoose the VAT return option and select the Nepali month (Bikram Sambat) the return covers. Filing under the wrong period is a common error that can trigger a mismatch notice later.
- Enter sales (output VAT) detailsEnter total taxable sales and the 13% VAT collected. Zero-rated sales, such as exports, are entered separately at 0%. Exempt sales under Schedule 1 are recorded but attract no VAT.
- Enter purchase (input VAT) detailsEnter taxable purchases and the VAT paid to suppliers, matched against valid VAT invoices. Only purchases used for taxable business activity qualify for input credit.
- Let the system calculate net VAT payableThe portal automatically computes output VAT minus input VAT. If input VAT exceeds output VAT, the excess carries forward to the next period, or can be claimed as a refund in eligible cases such as exports.
- Review and submit the returnCheck every figure against your books before submitting. Once submitted, the portal generates a return acknowledgement and, if VAT is payable, a payment voucher.
- Pay any VAT due by the 25thPay through ConnectIPS, internet banking, or an authorised commercial bank counter using the voucher number. Filing without paying by the deadline still triggers late-payment interest on the unpaid amount.
- Keep the acknowledgement and recordsSave the filed return, payment receipt, and underlying invoices. VAT records must be retained for at least six years and may be requested during an IRD audit.
Worked example: calculating net VAT payable
Suppose a Kathmandu trading firm sold taxable goods worth NPR 800,000 in a month and made taxable purchases worth NPR 500,000 from VAT-registered suppliers. Here is how the return works out at the standard 13% rate.
| Item | Amount (NPR) |
|---|---|
| Taxable sales (excluding VAT) | 800,000 |
| Output VAT collected (13%) | 104,000 |
| Taxable purchases (excluding VAT) | 500,000 |
| Input VAT paid (13%) | 65,000 |
| Net VAT payable (Output - Input) | 39,000 |
Quick net VAT calculator
Enter your monthly taxable sales and purchases (excluding VAT) to estimate net VAT payable at 13%. This is an estimate only - your actual return may include exempt or zero-rated items handled differently.
Please enter valid, non-negative numbers in both fields.
Nil returns and non-monthly filing
If your business had no sales or purchases during a tax period, you must still submit a nil return by the same 25th-of-the-month deadline. Skipping filing because there was "nothing to report" is one of the most common and easily avoided penalties. For the exact nil-return process, see our companion guide: How to File a Nil VAT Return in Nepal.
Most taxpayers file monthly, but small taxpayers below a specified turnover threshold and businesses in certain sectors, such as tourism, transportation, publishing, hotels, and cinema, may apply to the IRD for trimester (four-monthly) filing instead. This does not change the 25th-of-the-month due date; it only changes how often a return covers.
Common mistakes to avoid
- Claiming input VAT on purchases without a valid VAT invoice showing the supplier's registration number
- Mixing exempt sales (Schedule 1) into the taxable sales figure, which overstates output VAT
- Filing under the wrong tax period, especially around Nepali new year and month-end transitions
- Forgetting to file a nil return in a slow month, assuming no activity means no obligation
- Paying VAT after the 25th but before filing, which still attracts interest on the days the payment was late
Filing deadline and what happens if you are late
The filing and payment deadline is the 25th of every Nepali month for the previous month's transactions. For a full breakdown of how this date is calculated, read VAT Filing Deadline in Nepal: 25th of Every Month Explained. If you have already missed a deadline, see What Happens If You Miss the VAT Filing Deadline in Nepal? for the exact penalty and interest calculation, and how to get compliant again.
Expert tip
Reconcile your sales and purchase registers weekly instead of waiting until the 20th of the month. Businesses that reconcile continuously rarely miss the deadline, because the return itself takes only minutes to submit once the underlying numbers are correct.
Frequently asked questions
Do I need an accountant to file VAT returns in Nepal?
It is not legally required. Many small businesses file directly through the IRD Taxpayer Portal. However, businesses with complex purchases, imports, or exports often use an accountant or tax consultant to reduce the risk of input VAT errors.
Can I revise a VAT return after submitting it?
Yes, amendments are possible through the portal or by application to your Inland Revenue Office if you discover an error, though the process and any implications depend on the nature of the mistake. Correcting an error voluntarily is generally treated more favourably than an error found during an audit.
What if my input VAT is higher than my output VAT?
The excess input VAT is normally carried forward to the next tax period. Exporters and certain other categories with a persistent input surplus may apply for a cash refund instead.
Do service businesses and goods businesses file the same way?
The filing process on the portal is the same. The difference is mainly in the registration threshold - NPR 30 lakh annual turnover for services versus NPR 50 lakh for goods - not in how the monthly return itself is completed.
Is VAT filing different for businesses using e-billing?
Businesses on the IRD's mandatory e-billing system have their sales data captured in real time, which can pre-populate parts of the sales section of the return, but the taxpayer is still responsible for reviewing and submitting the return itself by the deadline.
Already past the 25th? Read what happens if you miss the VAT filing deadline to understand the exact fine and interest before you file.
Conclusion
Filing a VAT return in Nepal is a routine monthly task once your books are organised: reconcile sales and purchases, log into the IRD Taxpayer Portal, enter output and input VAT accurately, and pay any balance by the 25th. The businesses that struggle are almost always the ones that leave reconciliation to the last few days. Build a simple weekly habit around your sales and purchase registers, and the monthly return becomes a five-minute task rather than a source of stress.
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