PAN and VAT registration in Nepal: a guide for new companiesकम्पनीको प्यान र भ्याट दर्ता: कागजात, प्रक्रिया र सीमा

PAN and VAT registration in Nepal starts with a Permanent Account Number (PAN) from the Inland Revenue Department (IRD), which every company needs before it can open a bank account in its own name, issue bills or pay staff. VAT registration is compulsory once taxable turnover passes Rs 50 lakh a year for goods or Rs 30 lakh for services or mixed supplies, and any company can register earlier by choice.

Both use the same nine-digit number. VAT is a status added to the company's PAN, not a second number. This guide covers the order of steps, the documents, how long each takes and the mistakes that cost new companies time.

PAN or VAT: which does a new company need?

A PAN (स्थायी लेखा नम्बर) is the company's tax identity. Banks, customers, landlords and government offices all ask for it, so in practice the PAN comes straight after the OCR certificate. Without it the company cannot file its income tax return, deduct tax at source or issue a proper invoice.

VAT registration means the company charges 13% VAT on taxable sales, issues tax invoices and files a VAT return every month. It also lets the company claim back the VAT it pays on business purchases. A company that supplies only VAT-exempt goods or services cannot register for VAT at all.

VAT registration Nepal threshold: when is VAT compulsory?

Under Section 10 of the VAT Act 2052, as amended, a business must register for VAT when its taxable turnover over the last 12 months goes above the limits below. The application is due within 30 days of crossing the limit. Only taxable turnover counts; exempt sales are left out.

Some activities may need VAT registration whatever the turnover, and the VAT Rules have other triggers, such as certain imports. These change from time to time, so we check your company's activities against the current list before deciding. Whether VAT suits your pricing and margins is a tax question: for that, speak to our sister firm Nexus Advisory Services.

If you cross the threshold and register late, IRD can assess the VAT you should have charged from the date you crossed, plus fines and interest. You usually cannot go back to customers to collect it.

Voluntary VAT registration: should you register early?

Many new companies register for VAT from day one even though they are nowhere near the threshold. It often makes sense if:

• your customers are VAT-registered businesses that want a tax invoice so they can claim the VAT back;
• you will bid for tenders or supply larger companies, which often accept only VAT-registered suppliers;
• you will buy expensive equipment or stock at the start and want to recover the VAT on it;
• you will export, where sales are zero-rated and the VAT on your costs can be refunded.

The trade-off is a monthly VAT return from the first month, even when there are no sales. If you sell mainly to individuals and stay small, registering only for PAN first may be simpler.

VAT registration documents Nepal: what IRD asks for

The same document set covers the PAN and, if you want it, the VAT application. The Inland Revenue Office may ask for originals at the verification visit.

• OCR company registration certificate, and the memorandum and articles of association
• Share register (शेयर लगत) or the OCR record showing shareholders and directors
• Citizenship certificate (or passport, for foreign directors) and personal PAN of the directors
• Recent photographs of the director who will sign and visit the office
• Board decision authorising PAN and VAT registration and naming the signatory
• Rental agreement for the registered office, or land ownership papers if owned, with the landlord's citizenship copy
• Location map of the office and a working phone number and email
• Company seal (stamp)
• Ward business registration certificate, where the tax office asks for it

How to get PAN for company in Nepal: the online process

1. Register the company with OCR and download the certificate. Our company registration guide covers that stage.
2. Apply for the business PAN online. The request is made through CAMIS or the IRD taxpayer portal (taxpayerportal.ird.gov.np), with company, director, office and business-activity details. Tick VAT at the same time if you want it.
3. Note the submission number the portal gives you. The application is now with the Inland Revenue Office (IRO) or Taxpayer Service Office (TSO) that covers the company's registered address.
4. Visit that office with the original documents. The authorised director signs and gives a photograph and biometric verification. Company PAN registration in Nepal cannot be finished without this visit.
5. Collect the PAN certificate (and VAT certificate if applied). Display it at the office and set up your invoicing before the first sale.

IRD does not charge a fee for issuing a PAN. If you only want VAT later, the company applies for VAT registration on the taxpayer portal against its existing PAN and repeats the verification step.

How long does PAN and VAT registration in Nepal take?

With a complete document set, the online application takes an hour or less and the tax office usually issues the PAN on the day of the visit or within a few working days. VAT added at the same time normally follows within a similar period. Delays come from mismatched addresses, missing landlord papers, a director who cannot attend, or IRD system outages near month end.

Ward business registration: the related step

Most municipalities also require the company to register its business at the ward office (वडा कार्यालय) where the office sits, and to renew that registration each year. Each local level sets its own fee and checklist. Some tax offices ask to see it for VAT, and some wards ask for the PAN first, so we plan the order with your ward. Our first 90 days service covers the ward step along with the OCR initial filing.

What follows PAN and VAT registration

• Monthly VAT return: a VAT-registered company files a return for each Nepali month, with any VAT due, by the 25th of the following month (VAT Act, Section 19). File it even when there were no sales.
• TDS: when the company pays rent, salaries, contractors or professionals, it deducts tax at source and deposits it with an e-TDS return by the 25th of the next month (Income Tax Act 2058, Section 90).
• Billing: VAT invoices must come from IRD-approved printed bill books or registered billing software. Larger businesses must connect their billing to IRD's central system.
• Annual income tax return: every company with a PAN files one each year, even with no income.

These are tax duties, not registration work. Nexus Advisory Services handles monthly VAT, TDS and annual returns if you want them kept for you.

Common mistakes with PAN and VAT registration

• Thinking PAN and VAT are two separate numbers, and printing the wrong one on bills.
• Leaving the PAN for weeks after OCR registration, which holds up the bank account and the first invoice.
• Registering with a rental address that does not match the agreement or the OCR record.
• Watching the fiscal year instead of the last 12 months, and crossing the VAT threshold without noticing.
• Registering for VAT voluntarily and then skipping nil returns, which builds fines every month.
• Sending someone other than the authorised director to the verification visit.

Want the whole thing done in one go? See PAN, VAT and other registrations or start here and we will tell you what your company needs.

Questions people ask

General information, not legal advice. Rules change; we check the current position for your case before filing. Legal documents are drafted under the supervision of our retained, licensed advocate.