What are the tax rates, incentives and duties in Nepal?

The corporate tax rate in Nepal is 25%. But it is 20% in the case of special industries identified by the Industrial Enterprise Act and the Value Added Tax is 13%. Special duty reductions of five or ten percent are provided on imports from the Tibet Autonomous Region of the People’s Republic of China, member countries of the SAARC, and designated most-favoured nations. Companies are subject to fiscal incentives, changes in the import tariffs and other duties, and taxes are generally announced through the annual budget and later to be ratified by the Parliament before it is enforced. Exemptions and other incentives are also provided when industries fulfil certain criteria in terms of investment size, employment, sector etc.

On items that are commonly imported, duty is levied on an ad valorem basis i.e in proportionate to the estimated value of the goods or transaction concerned.  There are a few exceptions, where duty is based on quantity (volume or weight). The existing rates are 0-80% depending on the products. Most raw materials fall within the 0-10% duty-band, whereas finished goods and consumer items fall within the 5-30% duty-band.