Last updated : 11.05.2026
Expense rules in Nepal.
Nepal applies VAT at 13%, one of the simplest rates (single rate). E-invoice mandatory for companies >50M NPR.
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1Expense rules & reclaimable VAT
VAT 13% single rate. NPR pegged to INR (1.6 NPR = 1 INR).
| Category | VAT | Reclaim | Cap / Note |
|---|---|---|---|
| Meals | 13% | Deductible | VAT invoice + PAN |
| Lodging | 13% | Deductible | Company PAN |
| Alcohol | 13% | Limited | Excluded from business meals |
| Fuel | 13% | Deductible | VAT invoice |
| Transport | 13% | Deductible | Taxi/Pathao/airfare |
| Client gifts | 13% | Non-deductible | Strict cap |
Receipt
VAT invoice
PAN mandatory
Meal cap
<= NPR 2,500/pers
Above: justify
SourcesNepal IRD
2Mileage allowance
No official mileage scale. Actual reimbursement on receipts.
| Mode | Allowance | Cap | Note |
|---|---|---|---|
| Personal car | – | Fuel + tolls | On receipt |
| Company car | – | Fuel card | – |
| Taxi/Pathao | – | 100% on receipt | Receipt required |
Tracking
Logbook
Date, distance, purpose
SourcesNepal IRD
3Per diem and travel allowances
No official tax per diem. Company policy by city: Kathmandu most expensive.
| Destination | Meal | Lodging / night | Daily rate |
|---|---|---|---|
| Kathmandu | NPR 1 200 | NPR 4 500 | NPR 7 500 |
| Pokhara | NPR 1 000 | NPR 3 500 | NPR 6 000 |
| Chitwan | NPR 900 | NPR 3 000 | NPR 5 000 |
| Other cities | NPR 800 | NPR 2 800 | NPR 4 500 |
Conversion
~1 EUR = 145 NPR
Stable
SourcesNepal IRD
4Foreign VAT recovery
VAT recovery limited to resident companies via monthly return. No non-resident recovery.
| Zone | Mechanism | Deadline | Method |
|---|---|---|---|
| Resident companies | VAT credit | Monthly (25th) | VAT return |
| Non-resident companies | None | – | Final cost |
| SEZ | Exemption | On entry | Special regime |
Statute of limitations
4 years
Keep invoices
SourcesNepal IRD
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