| prajib |
Posted
on 18-May-02 11:02 PM
GOOD TO KNOW!!
cited from : business.com/directory/government_and_trade/associations/chambers_of_commerce/asia/nepal/index.asp
SOME INFORMATION ON TAX
TAX SYSTEM & TAX RATES IN NEPAL
FOR F.Y. 2058 / 59 (2001-2002)
VALUE ADDED TAX (VAT):
1. Value Added Tax is levied by a flat rate of 10 perecent. In certain cases the rate may be zero and certain products are exempt from VAT.
2. Value Added Tax is collected at every stage of selling goods and services.
3. Exports of taxable goods are zero rated.
4. A firm whose annual turnover of goods and services not exempt from VAT is less than Rs.2 million need not to be registered with the VAT office and collect VAT on sales.
5. But those firms which import taxable goods valued more than Rs. 10 thousand at a time need to be registered at VAT Office.
6. A firm registered with VAT Office may claim credit on tax paid on inputs.
7. Certain products such as primary food stuffs, agricultural products, industrial machineries are exempt from VAT.
A. INCOME TAX :
1. For individual, couple or family:
Exemption amount from income tax:
* Individual Rs. Rs. 55,000.00
* Couple & Family Rs. 75,000.00
On Taxable Income:
* First Rs. 75,000.00 15 percent
* On amounts higher than above 25 percent
2. Upto 7 percent income used for life insurance premium is allowed as personal expenses for remuneration tax payer only. Up to 10 percent of income deposited in employee provident fund account is deductible from taxable income.
3. For registered private & public limited companies, income tax is levied at a flat rate of :
* For Bank & Financial Institutions 30 percent
* For Others 25 percent
* Industrial enterprises coming under the preview of Industrial Enterprises Act are levied a maximum corporate tax of 20 percent.
4. For partnership firms, income tax is levied without granting exemption at a flat rate of 25 percent from their net income.
5. For temporary resident tax payers there is no exemption.
6. Income Tax on Export earnings is levied at 70 percent of the prevailing tax rate. But it can not be more than 0.75 percent of the total export turnover.
7. Three percent special fee is levied on net income of tax payers.
B. TAX RATE FOR VEHICLE OWNERS OPERATING THEIR VEHICLES ON HIRE
Annual Tax Payable (in Rs.)
Type of Vehicle Petrol Diesel
1. Car, Jeep, Van, Micro Bus Rs. 3,400.00 Rs. 4,700.00
2. Truck Rs. 11,500.00 Rs. 12,700.00
3. Bus Rs. 11,500.00 Rs. 12,700.00
4. Mini-Bus Rs. 7,400.00 Rs. 8,700.00
5. Mini-Truck Rs. 7,400.00 Rs. 8,700.00
6. Auto Rikshaw, Three Wheeler, Tempo Rs. 1,600.00 Rs. 3,500.00
7. Tractor Rs. 900.00 Rs. 1,600.00
8. Power Tiller Rs. 900.00 Rs. 1,250.00
C. ANNUAL INCOME TAX RATE FOR VEHICLE OWNERS OPERATING THEIR VEHICLES ON HIRE
Type of Vehicles Annual income Tax Rate (in Rs.)
1. Mini bus, mini truck, truck and bus Rs. 1,500.00
2. Auto rickshaw, three wheeler, tempo Rs. 850. 00
3. Car, jeep, van, micro bus Rs. 1,200.00
4. Tractor and power Tiller Rs. 750.00
D. THE APPLICABLE RATE OF ADVANCE TAX (INCOME TAX DEDUCTION AT SOURCE) FROM INCOME IN CERTAIN CATEGORIES OF PAYMENT IS AS FOLLOWS:
1. Remunerations - At a rate proportionate to annual remunerations
2. Rent tax for House / Land and other kinds of rental income 15 percent of the total rent in flat basis.
3. Payment made for consultancy services and services gained from Doctor, Engineer, Lawyer, Accountant, Auditor & other experts.
a. With income tax registration certificate 5 percent of the amount paid
b. Without income tax registration certificate 10 percent of the amount paid
c. For temporary resident tax payer 15 percent of the amount paid
4. Meeting allowance 15 percent of the allowance
5. For all kind of contracts 1.5 percent of the amount paid
6. Commissions, royalty, management fee, technical service fees and others 15 percent of the amount paid
7. Interest on taxable loan bonds issued by HMG and the Nepal Rastra Bank & Other interest 6 percent of the amount paid
8. Lotteries, gifts (Cash / in kind) 25 percent of the amount paid
9. Payaments made for the operation of rented or leased foreign aircraft 3 percent of the amount paid
10. Payment made for premium of re-insurance 3 percent of the amount paid
11. Commission amount paid to the insurance agent and stock broker 15 percent of the amount paid
12. Payment made to the foreign company for the transmission of foreign TV company 15 percent of the amount paid
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| prajib |
Posted
on 18-May-02 11:05 PM
continued:
E. TAX RATE FOR PRIVATE VEHICLES
Type of Private Vehicles
a. Car, Jeep, Van and Micro Bus Petrol Diesel
1. Up to 1300 cc Rs. 6,500.00 Rs. 10,000.00
2. 1301 cc to 2000 cc Rs. 8,500.00 Rs. 13,750.00
3. 2001 cc to 2900 cc Rs.10,000.00 Rs. 17,500.00
4. 2901 cc to 4000 cc Rs.12,300.00 Rs. 23,000.00
5. 4001 cc and above Rs.15,000.00 Rs. 28,000.00
b. Auto-Rikshwa, Three Wheeler, Tempo, Tractor, Power Tiller Petrol Diesel
a. Auto -Rikshwa, Three Wheeler, and Tempo Rs. 2,100.00 Rs. 3,000.00
b. Tractor Rs. 1,500.00 Rs. 21,00.00
c. Power Tiller Rs. 1,500.00 Rs. 1,500.00
c. Truck / Bus Rs. 13,800.00 Rs. 15,000.00
d. Mini-Truck / Mini-Bus Rs. 8,500.00 Rs. 9,800.00
e Motorcycle
1. Up to 90 cc Rs. 375.00
2. 91 cc to 150 cc Rs. 850.00
3. 151 cc to 300 cc Rs.1,250.00
4. 301 cc to above Rs.1,750.00
CUSTOM AND EXCISE DUTY
1. Prevailing custom duty rates are 130%, 80%, 40%, 25%, 15%, 10%, 5%, and 0%.
2. Prevailing export service charge is 0.5% but some industrial items such as vegetable ghee and plastic goods are liable to pay export duty. Export duty rates are 2% to 10%.
3. Countervailing duty are levied on goods imported to the Kingdom of Nepal from foreign countries as per the tariff rate of excise duty chargeable on goods produced (or if produced) within the Kingdom.
4. Goods imported from India into the Kingdom of Nepal are granted a rebate in the chargeable ad valorem (except specific) rate of customs duty by 20% upto the tariff rate of 40%, and by 10%, on rates above that.
5. Goods produced in and imported from China are granted a rebate in the chargeable ad vaolorem (except specific) rate of customs duty by 10%.
6. A Special fee of three percent is levied on goods of import value at the custom points. But special fee of one percent will be levied on imported goods of up to 5 percent custom duty.
INDUSTRIAL SECTOR:
The provision of Industrial Enterprise Act says that
1. Income tax shall not exceed 20 percent for any industry except cigarette, bidi, cigar, chewing tobacco, khaini and industry producing other goods of similar nature utilising tobacco as their basic raw material and alcohol or beer producing industries.
2. Industry using eighty or more than eighty percent of Nepali raw materials and Nepali manpower are granted a rebate of income tax at the rate of 10 percent except cigarette, bidi, cigar, chewing tobacco, khaini and industry producing other goods similar nature utilising tobacco as their basic raw materials, industries producing alcohol or beer and saw mills and catechu industries.
3. National priority industries which construct and operate road, bridge, tunnel, rope way , suspension bridges and manufacture and operate trolly bus and train are granted a rebate of 50 percent of income tax for a period of ten years from the date of operation and other industries listed as below shall be granted a rebate of 50 percent of the income tax on their income for a period of seven years from the date of operation.
i. Agro and forest based industries.
ii. Engineering industries (producing agriculture and industrial machine)
iii. Manufacturing industry which produces the devices that saves fuel and controls pollution.
iv. Solid waste processing industry.
v. Hospital and nursing home (outside the Kathmandu Valley).
vi. Industries producing ayurvedic, homeopathic and other traditional medicine and industrial producing crutch, seat belt, wheel chair, stretcher and stick and so on to be used in aid of the disabled and orthopedic.
vii. Cold storage installed for the storage of fruits and vegetables.
4. If an industry diversifies itself through reinvestment in the same or any other industry or expands its installed capacity by 25 percent or more, modernises its technology or develops ancillary industries, it is entitled to a deduction of 40 percent on the amount spent for acquiring new additional fixed assets from its taxable income. Such amount may be deducted on a lump sum or on an installment basis from the tax to be paid within a period of three years.
5. If an industry installs technology which controls pollution and minimizes the environment effects it is granted a rebate of 50 percent of its investment from taxable income. Such deduction are allowed on a lump sum or on an installment basis within a period of three years.
6. Pre-operation cost of an industry for skill development training is allowed to be capitalised.
7. A foreign investor is levied income tax of a rate of 15 percent only, on the income earned from technical as well as management service fees and royalty.
8. No income tax is imposed to a foregin investor on the interest income earned from foreign loan.
9. Industry providing employment to six hundred or more than six hundred Nepali citizens round the year, get additional facilities of income tax rebate at the rate of ten percent of their tax for that year.
10. No royalty is imposed if any industry generates electricity for its own use (captive power generation).
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