Starting a business in Nepal? Whether you’re registering a company, a sole proprietorship, or a partnership, obtaining a PAN (Permanent Account Number) and, in many cases, VAT (Value Added Tax) registration is mandatory.
Here’s everything you need to know to register for PAN and VAT in Nepal in 2025.
What is PAN and Why is It Mandatory?
PAN (Permanent Account Number) is a unique identification number issued by the Inland Revenue Department (IRD) to track tax liabilities and business transactions.
Who needs a PAN?
- All business entities (company, firm, proprietorship, partnership)
- Professionals (lawyers, doctors, consultants)
- Freelancers and contractors
- NGOs and INGOs
What is VAT and Who Needs It?
Value Added Tax (VAT) is a consumption-based tax levied on goods and services.
VAT registration is mandatory if:
- Annual turnover exceeds NPR 5 million
- The business imports/exports goods
- You’re supplying taxable services (e.g., consulting, catering, etc.)
Step-by-Step PAN Registration Process
Step 1: Prepare Documents
- Company registration certificate (or firm/proprietor registration)
- MOA and AOA (for companies)
- Citizenship of director/proprietor
- Lease agreement or office ownership proof
- Recent passport-size photos
Step 2: Visit Inland Revenue Department (IRD) Office
- Apply in person or through the online e-Tax portal (ird.gov.np)
- Submit documents
- IRD officer verifies and issues PAN certificate
Step 3: Display PAN Number
- Legally required to print PAN on all bills and invoices
Timeline: 1–2 working days
Fee: Free of cost
Step-by-Step VAT Registration Process
Step 1: Check Eligibility
- If your projected or actual turnover is above NPR 5 million, or you provide taxable services, registration is compulsory.
Step 2: Prepare Additional Documents
- PAN certificate
- Company stamp and letterhead
- Bank account statement
- Store layout or office photos
- Stock list (if applicable)
Step 3: Apply at IRD
- Visit IRD or apply online via the IRD portal
- Submit documents and stock statement
- Undergo field inspection if required
- Receive VAT certificate
Timeline: 3–7 working days
Fee: Free, but penalties apply for false declarations
Documents Checklist for PAN & VAT
| Document | PAN | VAT |
|---|---|---|
| Company Registration Certificate | ✅ | ✅ |
| MOA & AOA | ✅ | ✅ |
| Citizenship of Promoter | ✅ | ✅ |
| Lease Agreement/Office Proof | ✅ | ✅ |
| Passport-Size Photos | ✅ | ✅ |
| Stock Statement (if applicable) | ✅ | |
| Office Layout Photos | ✅ | |
| Company Stamp & Letterhead | ✅ |
Penalties for Non-Compliance
- Not obtaining PAN: Subject to fines and investigation
- Not registering for VAT when required: Up to NPR 100,000 fine + interest on taxes due
- Not issuing VAT bills: Fine of NPR 1,000 per transaction
Frequently Asked Questions (FAQs)
Q: Can I register PAN and VAT online in Nepal?
A: Yes. Visit ird.gov.np and follow the e-Tax portal instructions.
Q: How long does it take to register PAN or VAT?
A: PAN takes 1–2 days; VAT may take 3–7 working days depending on inspection.
Q: Is PAN necessary for freelancers?
A: Yes, if you are earning income independently, you must register for PAN.
Q: Can I voluntarily register for VAT below NPR 5 million turnover?
A: Yes. Voluntary VAT registration is allowed.
Expert Tips to Avoid Delays
- Ensure your lease agreement is notarized
- Have clear, labeled photos of your office or store
- Maintain proper books from Day 1 to avoid audit penalties
- Always display your PAN and VAT numbers at your business premises
Final Thoughts
Registering PAN and VAT is not just a legal formality but a crucial step toward operating a legitimate and scalable business in Nepal. It opens doors to banking, loans, partnerships, and long-term sustainability.
Need help with PAN/VAT registration or compliance? Our experts offer fast, affordable services tailored to your business.
Disclaimer: This blog is based on Nepalese regulations as of 2025. For real-time updates, visit ird.gov.np or consult a certified tax expert.
Leave a Reply