Nepal tax
Tax residence: At least 183 days in any continuous 365-day period. Special regime for new residents: Information technology services export: 50% tax reduction.
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Tax residence
- At least 183 days in any continuous 365-day period · A natural person present in Nepal for 183 days or more in a continuous 365-day period is resident.
- Residence is tested by ordinary place of abode, by presence of 183 days or more in any continuous 365-day period, or by posting abroad by the Government of Nepal.
Special regimes for new residents
Special regime
Information technology services export: 50% tax reduction
Tax relief
Details
Income earned in foreign currency from exporting information-technology based services is taxed at half the normal tax, until fiscal year 2084/85. 3
Taxed on
Income received in foreign currency from exported business process outsourcing, software programming, cloud computing and other IT-based services.
Who it applies to
- A person who exports IT-based services (business process outsourcing, software programming, cloud computing and similar) and earns foreign currency for them.
Exclusions
- The 50% reduction applies only to tax on the income received in foreign currency and only until fiscal year 2084/85.
Tax residence
Applies to persons liable to tax in Nepal on the exported services income.
Visas
Independent of any visa; a work or business route is still needed to work in Nepal.
Other taxes
The Act also gives a 50% reduction on the tax on income from other exports of Nepal-source goods and services.
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Standard rules and foreign-source income
Standard rules
Personal income tax: 1% on the first NPR 1,000,000, rising to 29%
Details
- Who: A person is resident if the ordinary place of abode is in Nepal
- Limit: NPR 1M/yr ≈ $6,520
Resident individuals pay 1% on taxable income up to NPR 1,000,000, (≈ $6,520) then 10% up to NPR 1,500,000, (≈ $9,770) 20% up to NPR 2,500,000, (≈ $16,300) 27% up to NPR 4,000,000 (≈ $26,100) and 29% above that, in income year 2083/84 under the Income Tax Act as amended by the Finance Act 2083. 1 2 3
Taxed on
Taxable income of residents (employment, business, investment) and Nepal-source income of non-residents; a single table now applies to individuals and couples.
Who it applies to
- A person is resident if the ordinary place of abode is in Nepal, if present in Nepal 183 days or more in a continuous 365-day period, or if posted abroad by the Government of Nepal.
Exclusions
- The 1% rate is not charged to taxpayers registered as a sole proprietorship, on pension income, or on the income of a person who contributes to a pension fund or the contribution-based Social Security Fund.
- Non-resident individuals pay a flat 25% on taxable income from Nepal.
Limits
- NPR 1,000,000 a year (≈ $6,520) · Upper limit of the 1% band
- NPR 1,500,000 a year (≈ $9,770) · Upper limit of the 10% band
- NPR 2,500,000 a year (≈ $16,300) · Upper limit of the 20% band
- NPR 4,000,000 a year (≈ $26,100) · Above this income the rate is 29% (27% plus 2 percentage points)
Days in the country
- At least 183 days in any continuous 365-day period · A natural person present in Nepal for 183 days or more in a continuous 365-day period is resident.
Tax residence
Residence is tested by ordinary place of abode, by presence of 183 days or more in any continuous 365-day period, or by posting abroad by the Government of Nepal.
Visas
Visa status does not itself decide tax residence; the presence test counts days in Nepal.
Other taxes
Residents may claim a credit for foreign-source income tax paid on assessable foreign-source income, limited to the average Nepali rate; social security and VAT are separate.
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VAT, social security and other taxes
- Residents may claim a credit for foreign-source income tax paid on assessable foreign-source income, limited to the average Nepali rate; social security and VAT are separate.
- The Act also gives a 50% reduction on the tax on income from other exports of Nepal-source goods and services.
Questions people ask
When do you become a tax resident in Nepal?
At least 183 days in any continuous 365-day period (A natural person present in Nepal for 183 days or more in a continuous 365-day period is resident). Residence is tested by ordinary place of abode, by presence of 183 days or more in any continuous 365-day period, or by posting abroad by the Government of Nepal.
Who qualifies for Information technology services export: 50% tax reduction?
A person who exports IT-based services (business process outsourcing, software programming, cloud computing and similar) and earns foreign currency for them. Independent of any visa; a work or business route is still needed to work in Nepal.
≈ USD figures are approximate: daily reference rates from ExchangeRate-API, dated 12 Oct 2026, refreshed when the site is updated.
Sources (3)
Official sources
- Tax rates for natural persons under the Income Tax Act 2058, income year 2083/84 · Inland Revenue Department, Nepal · checked 2026-10-12 · published 2026-08-07
- Finance Act, 2083 (published in the Gazette on 2083/03/30) · Inland Revenue Department, Nepal · checked 2026-10-12
- Income Tax Act, 2058 (as amended by the Finance Act, 2083) · Nepal Law Commission · checked 2026-10-11