VAT on foreign providers of digital services to consumers
The Nepalese Ministry of Finance has confirmed that non-resident providers of digital or electronic, broadcast and telephony services must register for VAT and charge local consumers at the standard rate of 13%. There is an annual VAT registration threshold of 2 million (approx. $15,800).
This applies from July 2022. For such transactions, foreign VAT-registered businesses must also comply with the Nepal e-invoicing requirements.
In addition, Nepal has imposed a 2% Digital Services Tax on the revenues of such foreign providers and facilitating marketplaces.
Check our global VAT on digital services tracker to follow all countries’ obligations around the world.
Determining if VAT due
To determine if Nepalese VAT is due, the provider must confirm consumption took place there and may rely of the following pieces of evidence to reason this:
- Consumer’s billing address
- Debit or credit card address
- IP address
- SIM or dialling code
What services are liable to VAT?
Income from the following services are subject to Nepalese VAT according to the Inland Revenue Department
- Advertisements
- Streaming, download or broadcast TV, films and music
- Data storage
- Cloud-based services
- Online gaming
- Mobile telephony
- Online marketplace services
- Software
- Online data, images and similar
The following electronic services are excluded: electronic books and newspapers.
VAT compliance issues
- There is a VAT registration threshold of 2 million (approx. $15,800). Although voluntary registration is also available.
- Tax invoices are optional
- VAT returns are monthly, and are due by the 25th of the following month.
Compiling global VAT or GST returns is complex, time consuming and fraught with tax liability risks. VAT Calc’s single platform VAT Filer can accurately complete any country filings with verified transactional data from our VAT Calculator or VAT Auditor integrated tools.
Asia Pacific VAT on digital services
| Comments (click for details) | Rate | Date | Threshold | Comments |
| Australia | 10% | Jul 2017 | AUD $75,000 | |
| Azerbaijan | 12% | Jan 2017 | – | |
| Armenia | 20% | Jan 2022 | AMD 115million | |
| Bangladesh | 5% - 15% | Jul 2019 | – | B2B and B2C |
| Bhutan | 7% | Jul 2021 | Nu 5million | |
| Cambodia | 10% | Mar 2022 | KHR 250m | |
| China | 6%-13% | N/a | Nil | Withholding VAT; B2B and B2C |
| Cook Island | 15% | 2019 | NZ$ 40,000 | |
| Fiji | 9% | TBC | FJD 300,000 | |
| India | 18% | Jul 2017 | - | |
| Indonesia | 11% | Aug 2020 | IDR600m or 12k customers | |
| Japan | 10% | Oct 2015 | JPY 10 million | |
| Kazakhstan | 12% | Jan 2022 | Nil | |
| Kiribati | 12.5% | 2017 | AU$ 100,000 | |
| Kyrgyzstan | 12% | Jan 2022 | Nil | |
| Laos | 10% | Feb 2022 | LAK 400m | |
| Malaysia | 8% | Jan 2020 | RM500,000 | |
| Nepal | 13% | Jul 2022 | Rupees 2m | Also 2% DST |
| New Caledonia | 11% | 2020 | XPF 7.5 million | |
| New Zealand | 15% | Oct 2016 | NZD 60,000 | |
| Pakistan | 2% | Sep 2021 | Nil | Marketplace Withholding VAT |
| Palau | 10% | Jan 2023 | $300,000 | |
| Philippines | 12% | May 2025 | P 3million | |
| Singapore | 9% | Jan 2020 | S$ 100,000 | |
| South Korea | 10% | Jul 2015 | Nil | |
| Sri Lanka | 18% | 2025? | LKR 60m | Proposals only |
| Taiwan | 5% | May 2017 | NTD 480,000 | |
| Tajikistan | 14% | Jan 2021 | ||
| Thailand | 7% | Sep 2021 | 1.8m Baht | |
| Uzbekistan | 12% | Jan 2020 | Nil | |
| Vietnam | 10% | Dec 2020 | – |
