Running a shop in Asan, a freelance studio in New Baneshwor, or a restaurant in Pokhara? Every bill involves Nepal's 13% VAT and often a 10% service charge, but calculating the exact breakdown by hand leaves room for errors. This 2082/83 VAT calculator handles VAT excluded, VAT included, service charge, percentage discounts, and bill splits for up to 20 people. Generate a printable receipt as PNG. All calculations run in your browser, no data is stored.
सामान थप्नुस्
VAT, service charge, discount
Divide equally among friends
Calculate VAT excluded (add VAT to price) and VAT included (extract VAT from total) with a single toggle switch.
Add 10% restaurant service charge on top of VAT for hospitality and hotel bill scenarios in one calculation.
Divide a total bill by up to 20 people. Each person's share shown with VAT and service charge included.
Apply a percentage discount before or after tax so your final bill reflects real promotions and deals.
Generate a formatted receipt card and save it as PNG for your records or as customer proof of payment.
Bill calculations run entirely in your browser. Your item amounts and split counts are never sent anywhere.
VAT-registered businesses in Nepal must file a monthly VAT return with IRD by the 25th of each month. If your annual turnover from goods exceeds Rs 50 lakh (or Rs 20 lakh from services), VAT registration is mandatory. Missing the filing deadline triggers a Rs 2,000 fine per month, even if you have zero transactions that month.
If you run a shop in Asan, a freelance design studio in New Baneshwor, or a small restaurant somewhere on Pokhara Lakeside, one thing you deal with every single day is the bill. Specifically, the moment a customer asks "कति पर्यो?" and you need to give them an exact, honest, and legally correct number. Nepal's VAT system is not complicated, but it trips up thousands of small business owners every month because nobody ever sat down and explained how it actually works. This guide does exactly that.
The VAT calculator above handles Nepal's 13% VAT in both excluded and included modes, service charge, discounts, bill splitting up to 20 people, and generates a printable receipt you can save as a PNG. But before you use any tool, you need to understand what you are actually calculating. A tool you understand is a tool you trust.
VAT stands for Value Added Tax. In Nepal it is governed by the Value Added Tax Act 2052 (1995) and administered by the Inland Revenue Department, which most Nepalis simply call the IRD. The standard rate of 13% has remained unchanged for many years — the government intentionally keeps a single flat rate because multiple rates create confusion and open doors for manipulation.
Here is the core concept: VAT is a consumption tax, not a tax on your business profit. It is a tax on the consumption of goods and services, ultimately paid by the end buyer. As a business, you are essentially a tax collector on behalf of the government. You collect 13% from your customer, hold it, and hand it over to the IRD every month by the 25th of the following month.
Nepal follows what is called the input-output VAT mechanism. If you buy goods from a wholesaler who charged 13% VAT, you can claim that VAT back as an input credit. When you sell to your customer, you charge 13% VAT and deposit only the difference between what you collected and what you already paid. This prevents double taxation at every stage of the supply chain.
Not every business in Nepal is required to register for VAT. The thresholds are set by business type:
Once you cross these thresholds, registration is mandatory, not optional. Failure to register when required results in IRD penalties that accumulate quickly. You can also voluntarily register below the threshold — many small service providers do this specifically because their clients (larger, VAT-registered companies) need to claim input credits and will prefer working with suppliers who can issue proper VAT bills.
Not everything attracts 13% VAT. Nepal divides goods and services into taxable at 13%, zero-rated (0% — applies mainly to exports), and tax-exempt. Exempt goods and services include basic necessities: rice, pulses, fresh fish, meat, eggs, fruits, flowers, edible oil, piped water, paddy, wheat, maize, millet, cereals, and fresh vegetables. Medical services, education, and passenger transport are also exempt.
Zero-rated is different from exempt. Zero-rated means VAT technically applies but at 0%. A shoe manufacturer in Kathmandu charges 13% VAT on domestic sales but 0% on exports — this lets exporters claim input credits on their purchases without charging VAT to their foreign customers. When you use the VAT toggle in the calculator above, think of it as switching between taxable items and exempt items in a mixed bill.
This is where most small business owners in Nepal make costly mistakes. The two modes produce completely different calculations from the same numbers.
VAT Excluded means the price you enter does not include VAT. VAT is added on top. A Rs 1,000 item becomes Rs 1,130 for the customer (Rs 1,000 + 13%). This is the most common mode for retail shops that display pre-VAT prices.
VAT Included means the price already contains VAT. To find the VAT amount inside an inclusive price, the formula is: VAT = Total × 13 ÷ 113. So if someone pays Rs 1,130 at a restaurant where prices are VAT-inclusive, the VAT inside that amount is Rs 1,130 × 13 ÷ 113 = Rs 130. The base price is Rs 1,000.
The VAT mode toggle at the top of the calculator is the single most important control on the page. Restaurants typically display VAT-inclusive prices on menus (VAT Included mode). Retail shops and most B2B invoices show pre-VAT prices (VAT Excluded mode). Set this correctly before entering any numbers.
Walk into almost any mid-range or upscale restaurant in Kathmandu and the bill has two additions at the bottom: service charge and VAT. Many customers get confused — are both legal? Why do they exist separately? What is the correct calculation order?
Service charge is not a government tax. It is an amount restaurants and hotels charge to compensate service staff — a formalized tip that goes to the business to distribute among employees. The standard rate is 10%, though this is not legally mandated. Restaurants can set their own rate. The toggle in the calculator lets you customize it for your actual rate.
The calculation order matters enormously. In Nepal, the standard practice endorsed by hospitality industry associations and followed by the IRD is:
This is why a Rs 2,000 restaurant bill becomes close to Rs 2,500 with service charge and VAT. The key point is that VAT is not calculated just on the food amount — it is calculated on the food plus service charge combined. The calculator above applies this in the correct sequence automatically.
The answer is simple but important: VAT is calculated on the price after the discount, not before. VAT applies to the net selling price of goods and services.
If you sell a product for Rs 1,000 with a 20% discount, the taxable amount is Rs 800. VAT is Rs 800 × 13% = Rs 104, not Rs 130. This matters for IRD compliance — if your VAT bill shows VAT calculated on the pre-discount price, you may face complications during an audit. The calculator applies the discount first, then service charge if enabled, and then VAT on the resulting amount.
The quick discount preset buttons (5%, 10%, 15%, 20%, 25%) let you apply a discount in one click without typing. For loyalty schemes, festival offers, or negotiated trade discounts, you can also enter a fixed rupee amount by switching to the Rs mode next to the discount field.
Bill splitting in the calculator supports up to 20 people. The most obvious use case is a group dinner where friends want to know exactly how much each person owes — after VAT and service charge have been added. But split billing is also relevant for shared workspaces, group orders, co-working memberships, and any situation where multiple parties share a common expense.
For freelancers, it is also useful when billing multiple clients for a shared project. Each person's share already includes the full VAT and service charge, so nobody has to estimate or round arbitrarily. The receipt preview on the right shows the per-person amount clearly, and when you save the bill as PNG, the split breakdown is included in the image.
If your business is VAT-registered, every sale requires a proper VAT bill. The IRD can fine you Rs 10,000 per missing or incorrect invoice. A valid VAT bill (called a Tax Invoice) must include:
You can issue a VAT bill by hand using a printed bill pad, or through IRD-approved accounting software such as Busy, Tally, or the IRD's own e-billing system. Digital billing makes your monthly D3 VAT return filing significantly easier and reduces arithmetic errors.
For a business entity, the tax period is monthly unless the IRD has granted permission otherwise. You must calculate your VAT liability for a month and submit payment by the 25th of the following month. If you collected VAT in Shrawan (July–August), you must file and pay by the 25th of Bhadra (August–September). Missing this deadline results in interest charges and penalties that accumulate fast.
The VAT return form in Nepal is called the D3 return. It requires you to list all sales (VAT output), all purchases with VAT input, and calculate the net payable. If your input VAT is higher than your output VAT in a given month, you carry the excess forward as credit. One important point many small businesses miss: you must file a nil return even in months with zero transactions.
Let us work through three scenarios that Nepali business owners encounter every week.
Customer buys clothes worth Rs 4,500 with a 10% festival discount applied.
| Item | Calculation | Amount |
|---|---|---|
| Item total | — | Rs 4,500 |
| Festival discount (10%) | Rs 4,500 × 10% | − Rs 450 |
| After discount | — | Rs 4,050 |
| VAT excluded (13%) | Rs 4,050 × 13% | + Rs 526.50 |
| Final bill | Rs 4,576.50 | |
Table orders food and drinks totalling Rs 6,800. Service charge 10%, VAT excluded.
| Item | Calculation | Amount |
|---|---|---|
| Food & drinks subtotal | — | Rs 6,800 |
| Service charge (10%) | Rs 6,800 × 10% | + Rs 680 |
| After service charge | — | Rs 7,480 |
| VAT (13%) | Rs 7,480 × 13% | + Rs 972.40 |
| Grand total | Rs 8,452.40 | |
| Per person (4 people) | Rs 2,113.10 | |
Graphic designer invoices Rs 35,000 for branding. Client is a VAT-registered company.
| Item | Calculation | Amount |
|---|---|---|
| Service fee | — | Rs 35,000 |
| VAT (13%) | Rs 35,000 × 13% | + Rs 4,550 |
| Total invoice | Rs 39,550 | |
The VAT-registered company pays Rs 39,550 but claims the Rs 4,550 as input VAT credit against their own output VAT. This is why corporate clients specifically request VAT bills — they literally get money back from the IRD through their input credit mechanism.
This is a section most online guides skip entirely. Freelancers in Nepal occupy an interesting position in the tax system. If your annual freelance income from services exceeds Rs 20 lakhs, you must register for VAT and charge 13% on all domestic invoices.
Many Nepali freelancers working for international clients wonder: do I charge VAT to foreign clients? The answer is generally no — services exported out of Nepal are zero-rated. You can still register for VAT and claim input credits on your laptop, software subscriptions, and other deductible business expenses, without charging your foreign clients any VAT. This can actually make registration beneficial even before hitting the threshold.
For domestic clients — corporations, startups, agencies — you almost always need to be VAT-registered to do serious business with them. Larger companies have procurement policies requiring proper VAT bills. If you cannot issue one, you lose contracts. This is one of the most practical reasons to register voluntarily, even at Rs 10–15 lakhs annual revenue.
Many Nepali small business owners are confused about when to issue a PAN bill versus a VAT bill.
A PAN bill is issued by a business registered for PAN but not VAT — typically a business below the registration threshold. It records the transaction and the business's PAN number but does not show any VAT. The customer pays only the base price.
A VAT bill (Tax Invoice) is issued by a VAT-registered business. It includes the VAT registration number, buyer's details, base price, and 13% VAT calculated on top.
The practical consequence: if you are a VAT-registered company buying from a supplier who gives you only a PAN bill, you cannot claim that transaction as input VAT credit. This is exactly why VAT-registered businesses strongly prefer buying from VAT-registered suppliers. The ability to claim input credits reduces your net VAT liability significantly and is a real financial advantage when choosing suppliers.
With effect from May 2022, Nepal extended VAT to digital services provided by non-residents to Nepali consumers. Non-resident digital service providers with annual transactions above Rs 2 million must register and charge 13% VAT. This affects Nepali businesses subscribing to Adobe Creative Cloud, Zoom, Google Workspace, and similar platforms — some of these providers have started adding VAT on Nepali transactions, and Nepali businesses can claim those as input VAT credits.
The IRD has also been progressively pushing businesses toward e-billing software. Digital invoicing means automatic serial numbering, fewer paper errors, and much easier monthly return preparation. Businesses that use IRD-approved software are not required to maintain physical books if their software generates sales and purchase reports in the correct format.
If you have crossed the turnover threshold or want to register voluntarily, the process in Nepal runs as follows. First, you need a PAN registered with the IRD — if you do not have one, PAN registration comes first and requires your citizenship certificate, business registration certificate if applicable, and a visit to your nearest IRD or Taxpayers Service Office.
Once you have a PAN, VAT registration is done online through the IRD portal at ird.gov.np. The form asks for your business registration number, registration date, address, director or proprietor details, and estimated annual turnover. After submitting online, you bring physical documents to the IRD office: the printed online submission with submission number, photocopy of business registration, and address proof such as a rent agreement.
An IRD officer verifies the information and takes biometric data of the proprietor or director who visits in person. On approval, you receive a VAT registration certificate containing your 9-digit VAT registration number. This number must appear on every Tax Invoice you issue from that day forward. Typical processing time is 7–15 working days for straightforward applications.
Last updated April 2026. VAT rates and IRD regulations as per current Government of Nepal rules. Rates are subject to change — always verify at ird.gov.np before making compliance decisions. This guide is for educational purposes and does not constitute professional tax advice.
Nepal has a single standard VAT rate of 13%, set by the Government of Nepal under the Value Added Tax Act 2052 (1995) and administered by the Inland Revenue Department (IRD). This rate has remained unchanged for many years. A single flat rate applies to all taxable goods and services — there are no reduced rates or multiple tiers as in some other countries. Some goods and services are VAT-exempt (rice, vegetables, medical services, education, etc.) and some exports are zero-rated at 0%.
VAT registration is mandatory for goods businesses with annual turnover above Rs 50 lakhs and service businesses with annual turnover above Rs 20 lakhs. Mixed businesses (selling both goods and services) use the Rs 20 lakhs threshold. Below these limits, registration is voluntary. Voluntary registration is often beneficial for service providers whose clients are VAT-registered, because it allows you to issue proper Tax Invoices that clients can use to claim input VAT credit. Registration is done online at ird.gov.np.
Basic, unprocessed food items are VAT-exempt in Nepal: rice, pulses, fresh fish, meat, eggs, fruits, flowers, edible oil, paddy, wheat, maize, millet, cereals, fresh vegetables, and piped water. However, packaged and processed food items, restaurant meals, and hotel food and beverage services are taxable at 13% VAT. A restaurant bill therefore attracts VAT (and usually service charge). If you are unsure whether a specific item is taxable or exempt, check the IRD's current exemption list at ird.gov.np.
Use the formula: VAT amount = Total Price × 13 ÷ 113. For example, if you paid Rs 1,695 at a restaurant with VAT-inclusive pricing, the VAT inside that total is Rs 1,695 × 13 ÷ 113 = Rs 195. The base price (before VAT) is Rs 1,695 − Rs 195 = Rs 1,500. In the calculator above, switch to VAT Included mode and enter the total price. The receipt will automatically show the extracted VAT amount separately as "VAT incl. (13/113)".
Service charge is not a government tax. It is a charge set by restaurants and hotels to compensate service staff — a formalized distribution mechanism for what would otherwise be individual tips. The standard rate is 10%, but there is no law fixing it at that level. Restaurants can charge more, less, or nothing. If a restaurant clearly displays its service charge policy on the menu, it is generally considered part of the contract when you enter and order. Small local dal bhat restaurants and roadside eateries typically do not charge service charge.
Yes — VAT is calculated on the total of food/drinks plus service charge, not just the food amount. The correct order is: (1) calculate subtotal, (2) add service charge on the subtotal, (3) apply 13% VAT on the combined amount. So if your food is Rs 2,000 and service charge is 10% (Rs 200), VAT applies to Rs 2,200, giving Rs 286 in VAT, not Rs 260. This is the industry standard in Nepal and the sequence the calculator uses.
The VAT filing and payment deadline is the 25th of the month following the tax period. For example, VAT collected in Shrawan (mid-July to mid-August) must be filed and paid by the 25th of Bhadra. The filing form is called the D3 return. You must file every month even if you had zero sales — a nil return is still required. Missing the deadline results in interest at 15% per annum plus up to 10% penalty on the overdue tax amount, both of which accumulate from the due date.
A PAN bill is issued by a business registered only for PAN (below the VAT threshold). It shows the business PAN but includes no VAT. A VAT bill (Tax Invoice) is issued by a VAT-registered business and includes the VAT registration number, buyer details, base price, 13% VAT, and grand total. The key practical difference: VAT-registered companies can only claim input VAT credit from VAT bills, not from PAN bills. This is why larger corporate buyers strongly prefer VAT-registered suppliers.
Yes, once your annual freelance service income exceeds Rs 20 lakhs, you must register for VAT and charge 13% on domestic invoices. You may also voluntarily register below this threshold. For international clients (foreign companies), services exported from Nepal are generally zero-rated — you do not charge VAT to foreign clients, but you can still claim input credits on your business expenses. Many corporate and agency clients in Nepal specifically require VAT-registered freelancers because it lets them claim back the 13% as input credit.
The Save PNG button captures the receipt visible on the right side of the page as a high-resolution image (3× scale for crisp output on phones and retina screens). You can type your shop name and address directly on the receipt before saving — click the editable fields at the top of the receipt. The PNG downloads to your device automatically and can be shared on WhatsApp, printed, or attached to an email. Note: the PNG feature requires the html2canvas library to load (it is loaded from a CDN), so an internet connection is needed for the first load.
VAT-exempt goods and services in Nepal include: basic food items (rice, pulses, fresh meat, eggs, fresh fish, vegetables, fruits, edible oil, paddy, wheat, maize, cereals), piped water, medical and health services, education services (schools, colleges, universities), passenger transport services, and certain agricultural products and inputs. Zero-rated (technically taxable at 0%) applies mainly to exports. The full and current list is published by the IRD. When creating a bill with both exempt and taxable items, you should handle them separately — use the VAT toggle per item or split into two bills if needed.
Missing the 25th deadline results in interest at 15% per annum on the outstanding tax, calculated from the due date. Additionally, a penalty of up to 10% of the tax due may be imposed. If you collect VAT from customers without being registered, you face separate fines and potential prosecution. The IRD has been increasing automated cross-checking of transactions, so mismatches between what suppliers report and what buyers claim are caught faster than before. The safest approach: file on time every month, even if it is a nil return.