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Tax Rates in Nepal for Financial Year 2015- 16, 2014-15, 2013-2014

For Resident Natural Persons

 

Tax Slab

 

Tax Rates

 

Individual

 

2015-16

 

2014-15

 

2013-14

 

(a) First Rs. 2,50,000

 

1%

 

1%

 

1%

 

(b) Next Rs. 1,00,000

 

15%

 

15%

 

15%

 

(c) Next Rs. 3,50,001 to Rs. 25,00,000

 

25%

 

25%

 

25%

 

(d) Balance Exceeding Rs. 25,00,000

 

35%

 

35%

 

35%

 

Couple

 

(a) First Rs. 3,00,000

 

1%

 

1%

 

1%

 

(b) Next Rs. 1,00,000

 

15%

 

15%

 

15%

 

(c) Next Rs. 4,00,001 to Rs. 25,00,000

 

25%

 

25%

 

25%

 

(d) Balance Exceeding Rs. 25,00,000

 

35%

 

35%

 

35%

 

For Non Residents

Nature of Transaction Tax Rates
  2015-16 2014-15 2013-14
 

Income earned from normal transactions

 

25%

 

25%

 

25%

 

Income earned providing shipping, air or telecom services, postage, satellite, optical fiber project.

 

5%

 

5%

 

5%

 

Income earned providing shipping, air or telecom services through the territory of Nepal.

 

2%

 

2%

 

25%

 

Repatriation of profit by Foreign Permanent Establishment

 

5%

 

5%

 

5%

 

Special Provision for Resident Natural Persons

 

Particulars

 

Tax Rates

  2015-16 2014-15
 

Income earned by natural person engaged on special industry
under sec(11) for whole year

 

Tax @ 20% on taxable
income for which tax rate
of 25% is applicable

 

Tax @ 20% on taxable
income for which tax rate
of 25% is applicable

 

Income earned from export by natural person

 

Tax @ 15% on taxable
income for which tax rate
of 25% is applicable

 

Tax @ 15% on taxable
income for which tax rate
of 25% is applicable

 

Income of trust

 

Tax rate as applicable to
Natural Person

 

Tax rate as applicable to
Natural Person

 

Special Provision for resident natural person having income exceeding Rs 2 Million but less than NPR 5 Million

Natural person those who meet following criteria shall be taxed on the basis of turnover as follows:

 

Natural person engaged in

 

Tax Rates

2015-16

 

Gas, Cigarette business doing transaction with 3% margin or
commission

 

0.5 % of
Transaction

 

Other person except those involved in business as above (a)

 

1.5 % of
Transaction

 

Person engaged in service business except doctor, engineer, auditor, layer,
player, actor or consultants.

 

2 % of
Transaction

 

Corporation Tax Rate

 

Particulars

 

Tax Rates

  2015-16 2014-15 2013-14
 

Normal Business

 

25%

 

25%

 

25%

 

Entity operating Special Industry under section 11 for whole year

Other entities involved in business of construction of
roads, bridges, tunnels, rope-ways, suspension bridges

Entity operating trolley bus or tramps

On transactions of cooperatives (other than tax exempted
transactions) of registered under Cooperative Act, 2048

Taxable income Export of entity having income source from
Nepal

Entity those involved in construction or operation of public infrastructure and to be transferred to Nepal Government orinvolved in construction of hydropower house and its generation and transmission.

 

20%

 

 

 

20%

 

20%

 

Banks and financial institutions (Commercial Banks,
Development Banks and Finance Companies)

Entity carrying General insurance business (Non life
Insurance)

Entity engaged in petroleum business under Nepal
Petroleum Act, 2040

Entity engaged in business of cigarette, tobacco, cigar, chewing tobacco, alcohol and beer

 

30%

 

30%

 

30%

 

Nepal Tax Rate for Financial Year 2013-14

Nepal Income Tax Rate for Individual Tax Payers

Lowest Individual Tax Rate is 1 % and Highest Rate is 25%+40% of tax

Individuals

Taxable Income

Tax Rate (%)

Upto 250,000

1%

250,001 - 350,000

15%

350,001 - 2,500,000

25%

Over 250,000

25% + additional 40% of the tax such calculated

Couple

Taxable Income

Tax Rate (%)

Upto 300,000

1%

300,001 - 400,000

15%

400,001 - 2,500,000

25%

Over 250,000

25% + additional 40% of the tax such calculated

 

Note 1: Natural person working at remote areas are entitled to get deduction from taxable income to a maximum of Rs 50,000 to
minimum of Rs 10,000. (A-50,000,B-40,000,C-30,000,D-20,000,E-10,000)
Note 2: Natural person with pension income included in the taxable income shall be entitled to deduct from taxable income an
additional 25% of amount prescribed under first tax slab.
Note 3: Incapacitated natural person shall be entitled to get deduction from taxable income an additional 50% of amount prescribed
under first tax slab.
Note 4: A natural person who has procured life insurance and paid premium amount thereon shall be entitled to a deduction of actual
annual insurance premium or Rs 20,000 whichever is less from taxable income.
Note 5: In case of the employee employed at the foreign diplomatic of Nepal only 25% of the foreign allowances are to be included in
the income from salary.
Note 6: In case of individual women having only remuneration income, they are allowed rebate of 10% on the tax liability calculated as
other natural person. i.e. not applicable for women with couple status.
Note 7: In case of decision of the organization to provide group retirement to its employees (in the event of merger or acquisition)
except to the payment made as per the employment term or the payment made by retirement fund, a rebate of 50% on
withholding tax.
* This is the Social Security Tax to be deposited in a separate revenue account (11211) provided for this purpose.

Non Residents

1. Income earned from normal transactions 25% flat rate
a) Income earned providing shipping, air or telecom services, postage, satellite, optical fiber project. 5%
b) Income earned providing shipping, air or telecom services through the territory of Nepal. 2%
c) Repatriation of profit by Foreign Permanent Establishment. 5%

Special provisions for Resident Natural Person
a) Income earned by natural person engaged on special industry under sec (11) Tax @ 20% on taxable income for which tax rate of 25% is applicable
b) Income earned from export by natural person Tax @ 15% on taxable income for which tax rate of 25% is applicable
c) Income of trust Tax rate as per section 1 and 4 of Annex 1 of Income tax act 2058 is applicable i.e. rate for natural person.

Corporate Tax Rates in Nepal

For Normal business Tax Rate is 25%

Tax Rate is 20% for the following

i Entity operated in special economic zones under section (11)
ii Other entities involved in business of construction of roads, bridges, tunnels, rope-ways, suspension bridges
iii Entity operating trolley bus or tramps iv On transactions of cooperatives (other than tax exempted transactions) of registered under Cooperative Act, 2048
v Entity those involved in construction or operation of public infrastructure and to be transferred to Nepal Government or involved in construction of hydropower house and its generation and transmission.

Tax Rate is 30% for the following

i Banks and financial institutions (Commercial Banks, Development Banks and Finance Companies)
ii Entity carrying General insurance business (Non life Insurance)
iii Entity engaged in petroleum business under Nepal Petroleum Act, 2040
iv Entity engaged in business of cigarette, tobacco, cigar, chewing tobacco, alcohol and beer

Capital Gains Tax in Nepal

Individual
Tax withholding on capital gain for natural person on transaction exceeding Rs 3 million (to be made by Land revenue office at the time of registration):
- disposal of land or land & building owned for more than 5 years 2.5%
- disposal of land or land & building owned for less than 5 years 5%

Corporate

Income from disposal of non-business chargeable assets Included in Income
(Capital gain)

Nepal Due Dates for filing Returns / Reporting and Payment

 
 

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