How to Get PAN and VAT Registration in Nepal: Step-by-Step Guide

If you’re starting a business in Nepal — or you already run one and keep hearing about PAN and VAT without anyone explaining what they actually mean — this guide covers PAN and VAT registration in Nepal plainly and in order, with the parts that are genuinely confirmed kept separate from the parts you should double-check yourself. A few harder words get their Nepali equivalent in brackets so nothing gets lost in translation.

The short version: PAN and VAT are not the same thing, even though people often use the two words interchangeably. Nearly every business in Nepal needs a PAN (Permanent Account Number) sooner or later. VAT (Value Added Tax) registration is different — it only applies once your business meets certain conditions set by law, mainly your yearly turnover (कारोबार) or the type of business you run. A small shop, a café, or a freelancer can be completely legal with just a PAN and no VAT registration at all.

The Inland Revenue Department (IRD) is the government body responsible for both. Most of the process now runs through IRD’s online Taxpayer Portal, but depending on what you’re registering, you may still need to visit your local tax office in person — either an Inland Revenue Office (IRO / आन्तरिक राजस्व कार्यालय) or a Taxpayer Service Office (TSO / करदाता सेवा कार्यालय).

One more thing before we get into it: tax rules in Nepal change with every year’s budget. The VAT threshold (सीमा) for service businesses, for instance, has moved more than once in recent years. This guide reflects IRD’s current rules as of fiscal year 2083/84, and wherever a figure could shift with the next budget, we’ve said so — check it against current IRD guidance before you rely on it for an actual application.

What Is PAN in Nepal?

PAN stands for Permanent Account Number — a unique 9-digit number issued by the Inland Revenue Department to identify taxpayers (करदाता), individuals and businesses alike, for every kind of tax-related transaction. It’s your tax identity: it’s what shows up on invoices, tax returns, bank paperwork, and any dealing you have with IRD. PAN is required under the Income Tax Act, 2058 (2002), the law that makes registration mandatory (अनिवार्य) for anyone earning taxable income or running a business.

There are two main types:

• Personal PAN (PPAN): issued to an individual — salaried employees, freelancers, professionals, or anyone who needs a PAN for personal financial or tax purposes.
• Business PAN (व्यवसाय PAN): issued to a registered business entity — a sole proprietorship, partnership, or company — separately from any individual PAN the owner might already hold.

Businesses need a PAN for reasons that go beyond simply following the law: to open a business bank account, to issue proper bills and invoices, to file any tax return, and often to bid on contracts or qualify for government support programmes. If you’re still deciding what kind of business to start, it’s worth reading our roundup of small business ideas in Nepal before you get to the registration stage.

Does PAN need renewing every year? No — once issued, a PAN stays valid for as long as the individual or business entity exists. What you do need to do is keep your registered details current: if your business address, ownership structure, or business name changes, update it with your Inland Revenue Office. And if you ever need to check whether a PAN is valid and correctly registered — say, before dealing with a new supplier — IRD’s own PAN search tool lets you look it up directly.

What Is VAT in Nepal?

VAT, or Value Added Tax, is an indirect consumption tax charged on the sale of most goods and services in Nepal. It’s governed by the Value Added Tax Act, 2052 (1996), as amended, and administered by the same department that handles PAN. The current standard rate is a flat 13%, unchanged for years.

Here’s the practical difference from PAN: a PAN simply identifies you as a taxpayer. VAT registration (VAT दर्ता) is a separate step that authorises — and obligates — a business to charge VAT on its sales, collect it from customers, and remit it to the government on a regular filing schedule. A business with only a PAN doesn’t charge VAT on its bills; a VAT-registered business does, and takes on ongoing compliance work as a result.

Whether your business needs to register depends mainly on two things: how much you sell in a year (turnover), and what kind of business you run. Some categories — importers, for example — must register from day one regardless of size. Everyone else generally becomes liable once turnover crosses a threshold set by the current Finance Act. We cover that threshold, with a proper source caveat, in the next-but-one section rather than here.

PAN vs VAT Registration in Nepal: What Is the Difference?

A side-by-side view tends to make this clearer than paragraphs of explanation:

Who Needs a Business PAN in Nepal?

In practice, if you’re operating as a registered business of almost any kind, you need a Business PAN. That covers:

• Sole proprietorship (एकल स्वामित्व) — a one-person business registered at your local Ward Office or, depending on scale, the Department of Cottage and Small Industries. The most common structure for small shops, cafés, and service businesses.
• Partnership (साझेदारी) — owned by two or more people under a formal partnership deed. Needs its own Business PAN, separate from each partner’s personal PAN.
• Company — a private or public limited company registered with the Office of the Company Registrar (OCR). Business PAN is a standard part of getting operational after incorporation.
• Professionals and business activity generally — anyone conducting business under a registered name, rather than simply earning a salary, is generally expected to hold PAN appropriate to that activity.
• Other entities — cooperatives (सहकारी), NGOs, and other registered organisations also need their own PAN. Foreign-invested businesses go through a related but separate track — the Taxpayer Portal lists “Application for Non-Resident Investor Registration” alongside the standard business route — so if you’re structuring a venture with outside capital, our piece on foreign investment in Nepal is worth reading first.

One detail that trips people up: someone who already holds a Personal PAN and then starts a business doesn’t automatically get a Business PAN — it’s a separate application. If you’re weighing which sector to build in first, our overview of the best startup sectors in Nepal is a useful starting point before the paperwork.

Who Needs VAT Registration in Nepal?

VAT registration is governed by the Value Added Tax Act, 2052, and by the turnover thresholds set under the Finance Act currently in force. There are two routes into mandatory registration:

1. Crossing the turnover threshold. As of fiscal year 2083/84, the figure consistently cited across current tax-advisory sources is annual turnover above roughly NPR 50 lakh (5 million) for a goods-only business, and above roughly NPR 30 lakh (3 million) for a services-only or mixed business. This services/mixed figure was raised from a lower threshold in a recent Finance Act — a good example of why an old article can quietly get this wrong.
2. Operating in a mandatory category, regardless of turnover. Businesses that import goods for commercial purposes are one clear example — VAT registration applies from the first transaction, not once turnover hits a figure. A handful of other specified categories exist too.

A mix-up that catches a lot of people out: having a PAN does not mean you are automatically VAT-registered. Most small businesses in Nepal hold a PAN and nothing more, because they’ve never crossed the threshold or entered a mandatory category.

There’s also a voluntary path: a business under the threshold can choose to register anyway, usually to claim input-tax credit on its purchases. That’s a real trade-off — you gain the credit, but take on full monthly filing obligations — worth thinking through rather than defaulting into.

Documents Needed for Business PAN Registration

The exact list depends on your business structure, but a fairly consistent core applies across the board — IRD’s own FAQ confirms the core individual-registration list directly, and the same documents carry over for a business. IRD also publishes the current PAN forms on its site if you want the official blank form itself:

Commonly required, regardless of business type:

Required depending on the business or entity type:

Company documents in particular sometimes need to be notarised before the tax office will accept them, so check that with your chosen office before your appointment. Because the exact list can vary slightly by office and entity structure, treat this as a strong starting checklist rather than a guarantee — confirm anything unusual about your situation with IRD or a tax professional first.

How to Register for Business PAN in Nepal

The current process runs through IRD’s Taxpayer Portal, with an in-person step at the end:

1. Go to the official IRD website at ird.gov.np.
2. Open the Taxpayer Portal from the site.
3. In the Registration (PAN, VAT, Excise) section, look for the registration options relevant to you.
4. Select Application for Business Registration if you’re registering a business (individuals use “Application for PPAN Registration” instead).
5. Choose the relevant tax office — your registration is tied to a specific IRO or TSO, generally based on your business address.
6. Enter your business details: name, registered address, nature of business, registration date, and ownership structure.
7. Upload the required documents from the checklist above.
8. Submit the online application — this generates a submission number and an e-form.
9. Print the completed application form.
10. Take the printed form, with your original documents (or attested copies), to your selected office for verification. This in-person step is the part people most often don’t expect.
11. Once verified, your PAN is issued — download the certificate from your Taxpayer Portal account afterwards.

Button names and exact menu wording can shift slightly as IRD updates the system, so treat this as the general shape of the process rather than a pixel-perfect walkthrough.

How to Register for VAT in Nepal

VAT registration is a separate process that assumes you already have an active PAN — you cannot complete it without one. Only apply once you know VAT applies to you, based on the threshold and category rules above.

1. Confirm VAT actually applies to your business — check turnover against the current threshold, or confirm whether your business type is a mandatory category.
2. Log in to the IRD Taxpayer Portal using your existing PAN credentials.
3. Under Registration (PAN, VAT, Excise), select the VAT registration option — new businesses can sometimes select VAT alongside their initial PAN application rather than adding it later.
4. Enter the VAT-specific details requested: registered address, nature of business, estimated or actual annual turnover, and bank account details.
5. Submit any additional documents the VAT application asks for.
6. Submit and print the confirmation as instructed.
7. Visit your Inland Revenue Office or Taxpayer Service Office for verification — this typically confirms your premises and identity, and may include biometric verification (बायोमेट्रिक प्रमाणीकरण) for the proprietor or authorised signatory.
8. Once approved, IRD issues your VAT Registration Certificate. Nepali law requires it to be displayed at your business premises.

After that, VAT-registered businesses take on ongoing obligations — mainly a monthly VAT return through the same Taxpayer Portal, and proper VAT invoicing on every applicable sale.

Can I Apply for PAN Registration Online in Nepal?

Yes — you can start a PAN application entirely online, through the IRD Taxpayer Portal or the government’s Nagarik App (Services → Inland Revenue Department → PAN Registration). Both let you fill in your details and upload documents from home.

What “online” doesn’t mean here is fully remote, start to finish. For most applicants, the process still requires a verification step at a physical tax office before the registration is finalised — the next section covers exactly what that involves.

Do You Need to Visit the Inland Revenue Office?

For most first-time applicants — yes, at least once. You can complete the form, upload documents, and get a submission number entirely online. But before your PAN or VAT registration is finalised, IRD currently requires in-person verification at your selected office (आन्तरिक राजस्व कार्यालय / करदाता सेवा कार्यालय) — bringing your printed application and original documents, and in many cases completing biometric verification (a fingerprint or photo capture). For VAT specifically, one director or the proprietor typically needs to make that visit personally.

So budget time for at least one office visit, rather than assuming you can register entirely from your phone or laptop.

How Much Does PAN and VAT Registration Cost in Nepal?

Based on current IRD practice: PAN registration has no government fee (सरकारी शुल्क छैन), whether Personal or Business PAN, and whether you apply online, through Nagarik App, or in person.

VAT registration also carries no direct government registration fee. The cost that does show up is indirect — preparing and possibly notarising documents, travel to your tax office, and, once registered, the ongoing cost of running proper VAT-compliant invoicing and monthly filing.

How Long Does PAN or VAT Registration Take?

IRD doesn’t publish one official turnaround time that applies to every application, so this genuinely varies by office, season, and how complete your documents are. Based on commonly reported experience rather than an official figure, straightforward applications are often processed within a few working days once in-person verification is complete — but ask your selected office directly what to expect when you submit, since they’ll know their own current workload better than any general guide can.

Common Problems People Face During PAN/VAT Registration

• Wrong personal or business details. A misspelled name or mismatched date of birth between your citizenship document and your application is one of the most common causes of delay. Double-check every field first.
• Incorrect tax office selection. Your registration is tied to a specific IRO or TSO based on your business address — confirm which one covers your area before you start.
• Incomplete documents. Gather everything from the checklist above before you open the online form.
• Address mismatch. Make sure your rental agreement or ownership document matches, word for word, what you type into the form.
• Business registration details not matching. Your Ward Office or OCR registration and your PAN application need to describe the same business the same way — any mismatch is a common reason applications get sent back.
• Difficulty with the online form. The Taxpayer Portal is available in English and Nepali, but tax terminology can still be confusing. Ask a knowledgeable friend, accountant, or your tax office’s helpdesk if anything is unclear.
• Uncertainty about VAT eligibility. If you’re close to the threshold, check with IRD directly rather than guessing either way.
• Relying on outdated information. Thresholds and procedures change with each year’s budget — the services/mixed VAT threshold alone has moved more than once. Confirm the current rule rather than trusting an old blog post, or this article a year from now.
• Paying “fees” that aren’t real. The government registration itself is free — treat any claim otherwise with real suspicion.

PAN and VAT Registration for Different Types of Businesses

The core rules apply the same way across business types — PAN is close to universal, VAT depends on turnover and category — but here’s how that plays out for specific kinds of businesses people commonly ask about.

Small shop

A neighbourhood kirana pasal or general store almost always needs a Business PAN once it’s operating as a registered shop. Whether VAT applies depends entirely on turnover — plenty of small shops stay comfortably under the threshold for years, while others cross it as they grow. If you’re still deciding what kind of shop makes sense, our guide to small business ideas in Nepal covers realistic startup costs across several options.

Cafe or restaurant

Cafés and restaurants need Business PAN like any other registered business. VAT eligibility again comes down to turnover, though it’s worth checking your specific category with IRD rather than assuming either way — a blanket claim like “every café must register for VAT” isn’t something this guide can support without seeing your actual turnover and category.

Online business

Selling online doesn’t exempt a business from PAN or VAT rules. A registered online store or a formal social-media-based business is treated the same way as a physical one for tax purposes — if it’s operating as a business rather than casual personal selling, it typically needs Business PAN, and VAT follows the same rules as any other business.

Freelancer/professional

Independent professionals — consultants, designers, developers, and similar — generally register for at least a Personal PAN, since it’s how income gets formally reported and how clients can pay you properly. Whether VAT applies depends on your annual earnings, under the service-business threshold covered earlier.

Trading business

Import and export trading is one of the clearer cases where VAT registration doesn’t wait for turnover — businesses that import goods commercially are generally required to register from their first transaction. If you’re exploring trade-based opportunities, our look at the Nepal pashmina export industry is a useful real-world example of how an export-oriented business gets structured.

Manufacturing business

Manufacturing and processing businesses need Business PAN like any other entity, and VAT again comes down to turnover and product category. The ongoing effort to revive Hetauda’s textile industry is a good real-world look at what a Nepali manufacturing operation is actually up against on cost and compliance, registration included.

Tourism business

Hotels, homestays, trekking agencies, and other tourism businesses need Business PAN, and many cross the VAT threshold once they’re operating at any real scale. If you’re already running a tourism business, our roundup of digital payment tools for Nepali tourism businesses is worth a look once you’re registered and taking bookings.

Agriculture-related business

Farming itself is often treated differently from other business activity under Nepal’s tax rules. But once a farm operation moves into processing, packaging, or selling under a registered business name — the way a moringa processing business or a mushroom farming operation typically does — Business PAN generally becomes relevant, and VAT follows the same rules as any other business. If you’re also exploring government support, our guide to the Nepal agriculture subsidy explains where registration status matters for eligibility.

PAN and VAT Registration: Common Questions

Before You Submit Your PAN or VAT Application

• Business details are correct and match your source documents exactly
• Name and address match your supporting documents, word for word
• You’ve confirmed the correct tax office for your business address
• All required documents are prepared, including entity-specific ones like MOA/AOA if applicable
• You’ve checked whether VAT eligibility actually applies to you
• You’ve confirmed current IRD requirements rather than relying on an older source
• You’ve reviewed the application information once more before hitting submit

Getting your PAN and VAT registration in Nepal right comes down to two different questions: PAN identifies you to the tax system, and VAT applies only once your business meets specific turnover or category conditions. Which of these you actually need depends on your business and how it’s structured — there’s no single answer that fits every shop, café, freelancer, or trading business. Use IRD’s current Taxpayer Portal process rather than an old guide (this one included, a year or two from now), and when a number or a document requirement genuinely matters to your situation, confirm it with IRD directly before you submit.