Monday, October 1, 2018

How to obtain Tax Clearance Certificate in Nepal?

How to obtain Tax Clearance Certificate in Nepal?
करचुक्ता प्रमाणपत्र प्राप्त गर्ने तरिका सम्बन्धी जानकारी !!


A tax clearance certificate confirms that an individual or entity:

is in compliance with Nepalese Income Tax Act, 2058 and its regulations requirements,
have submitted the tax return & audit report, and
all the taxes have been duly paid to the Government of Nepal.
Who issues Tax Clearance Certificate in Nepal?The Inland Revenue Department (IRD) is authorized to issue a tax clearance certificate on behalf of the Ministry of Finance, Government of Nepal.


How do I apply?
An application must be filed at concerned Tax Payer's office with NRs. 10 stamps with following documents enclosed:

1. Entity:

Copy of the payment of taxes per self-assessment submitted to IRD.
Copy of the Audit Report duly audited by the member of the Institute of Chartered Accountants of Nepal (ICAN).
Copy of the Previous Year Income Tax Return and a copy of tax clearance certificate obtained if any
Copy of the Permanent Account Number (PAN) certificate
2. Individual:

In the case of Income from Employment (Salary Income), income detail and a copy of the tax deposit detail certified by the employer.
In case of Rental Income from House or Land, income detail and a copy of the tax deposited for the period.What happens after an application is submitted?


Tax officer reviews the document submitted for completeness and verifies that taxes have been paid per the self-assessment submitted.
The application is, then, forwarded to the Tax clearance Unit which is then, forwarded to Dues Assessment Desk to verify whether there are any outstanding liability and/or errors.
If there is an outstanding liability, the concerned applicant must clear the due amount and attach the deposit slip along with the application.
Once Due Assessment Desk confirms that outstanding liability has been cleared, Tax clearance unit registers the application in the Tax Portal and issues a unique tax submission number.
Tax Officer, then, re-verifies that application is complete and there is nothing outstanding.
Tax Clearance Unit, then, prints the certificate which is authorized by the IRD officials.
The authorized certificate is then stamped at the registry desk and handed over to the applicant.How much does it cost?
There is no fee involved in obtaining a tax clearance certificate in Nepal. However, individual and entity must ensure that all outstanding dues to IRD have been deposited.


How much time does it require?If there aren't any outstanding or errors in your application or the enclosed documents, officially IRD will take 2-3 working days to issue the certificate. However, if there is any complication, it depends on how best you address those issues.

When do I need a Tax Clearance Certificate?
Tax clearance certificate has always been a voluntary, as an entity or individual has to file an application themselves to obtain one. However, these days, all the government entities, banks, financial institution, I/NGOs and public limited companies have made this certificate mandatory to obtain any business opportunity such as tenders, bids, expression of interest, standing list, request for proposal and request for an application.

In addition, it is also required to obtain a new loan or renew the loan from the banks and financial institution.

Do I need to pay tax again for the period of Tax Clearance Certificate?
Tax clearance certificate is generally issued when the self-assessment and the amount of tax paid matches with each other and there is no outstanding dues to IRD. However, if IRD during the jeopardy assessment or amended assessment comes to the conclusion that additional taxes need to be paid for the period when Tax Clearance Certificate was granted then, it will be the responsibility of the applicant to pay such additional dues assessed by IRD.

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