Income Tax Act 2058 Registry
Nepal Withholding Tax (TDS) Rates Directory
Searchable, categorized directory of statutory withholding rates under Sections 87, 88, 88Ka, and 89. Designed for accountants, CFOs, and procurement managers in Nepal.
Showing 11 Tax SchedulesFinance Act 2081 Provisions
| Section | Payment Nature | Recipient Type | Rate | Withholding Category | Statutory Notes |
|---|---|---|---|---|---|
| Section 88 | House / Office Space Rent | Individual (Natural Person) or Entity | 10% | Final Withholding | TDS on house rent paid to natural persons is treated as final withholding tax under current municipal directives. |
| Section 88 | Consultancy & Professional Services | Resident Individual / Non-VAT Registered entity | 15% | Adjustable Credit | If the provider is VAT-registered and issues a VAT invoice, standard rate is 1.5% under Section 89. |
| Section 89 | Professional / Service billing with VAT Invoice | VAT Registered Resident Entity/Individual | 1.5% | Adjustable Credit | Applicable on service supply contracts against tax invoices. |
| Section 88 | Bank Interest on Deposits | Resident Natural Person | 5% | Final Withholding | Final withholding tax on interest paid by BFIs to individuals not engaged in business. |
| Section 88 | Interest on Loans / Inter-company debt | Corporate Entity / Other | 15% | Adjustable Credit | Adjustable against annual corporate income tax assessment. |
| Section 88 | Dividend Distribution | Resident Shareholder (Individual / Entity) | 5% | Final Withholding | Final withholding tax for resident natural persons. |
| Section 88Ka | Vehicle & Heavy Equipment Rental | Non-VAT registered vehicle owner | 10% | Adjustable Credit | If VAT-registered transport service, Section 89 (1.5%) applies. |
| Section 89 | Supply of Goods & General Contract Works | Any Resident Contractor / Supplier | 1.5% | Adjustable Credit | Mandatory deduction by entities on supply of goods/services against VAT invoices. |
| Section 88 | Commission & Brokerage Fees | Resident Agent / Broker | 15% | Adjustable Credit | Adjustable tax credit against annual income tax return. |
| Section 88 | Royalty & Technical Service Fees (Foreign Remittance) | Non-Resident Entity | 15% | Final Withholding | Withholding on software licenses and foreign tech support; rate may be reduced under applicable DTAA. |
| Section 87 | Employment Remuneration & Benefits | Resident Employee | Progressive (1% - 39%) | Final Withholding | Deducted monthly on estimated annual income basis using prevailing slab rates. |
Monthly ETDS Reconciliation Reminder
All tax deducted must be deposited to the Government of Nepal's consolidated tax account via designated commercial banks by the 25th of the following Nepali month. Deducting entities must submit e-TDS returns on the IRD portal to ensure withholding credits reflect in the taxpayer's ledger.