Nepal VAT and Digital Service Tax on Stripe Sales

A software company in Denver sells a $15 monthly plan, and about 150 of its subscribers pay with cards issued in Nepal. Stripe's supported countries table has listed Nepal since 18 December 2024, so Stripe Tax can calculate Nepal's VAT on digital products sold by sellers based outside the country. Stripe's Nepal entry gives the trigger as 3,000,000 NPR over 12 months, and that's where most guides stop.

Nepal doesn't stop there. A non-resident selling digital services to people in Nepal deals with two separate taxes, set up under two different laws, with two thresholds measured two different ways:

• Value added tax at 13 percent. It's charged to the customer, filed every Nepali month, and due by the 25th of the following month. Stripe Tax calculates this one.
• Digital Service Tax at 2 percent. It's a tax on the seller, filed and paid once a year, and the law says you can't add it to the price. Stripe doesn't calculate it at all.

This guide works from the documents Nepal's Inland Revenue Department (IRD) publishes on its own site and from Stripe's documentation, and quotes both. The IRD documents are in Nepali, and the translations here are ours. Where the documents leave a question open, this guide says so. If you want Stripe's VAT amounts in QuickBooks without retyping them, start a free trial of Acodei.

Two taxes, two laws, one set of sales

The two taxes sit in different places in Nepal's law, which is why sellers miss one of them.

• VAT comes from section 10ख1 of the Value Added Tax Act, 2052. A footnote in the IRD's consolidated text of the Act says the section was added by the Finance Act, 2079 (2022) and amended by the Finance Act, 2081 (2024). The details for foreign sellers are in an IRD procedure, the Procedure on VAT on Electronic Services Provided by Non-Residents, 2079 (third amendment, 2082). This guide calls it the VAT procedure.
• Digital Service Tax (DST) isn't in a standing tax act at all. It's imposed afresh each year by the annual Economic Act (the Finance Act's current name). For the fiscal year that began in July 2026 it's section 23 of the Economic Act, 2083, published in the Nepal Gazette on 2083/03/30 (mid-July 2026). The working rules are in the IRD's Digital Service Tax Procedure, 2082, written for the previous year's version of the same tax (section 16 of the Economic Act, 2082). We found no 2083 edition, so this guide uses the 2082 procedure where the 2083 Act doesn't change the rule.

The two clearly run side by side rather than one replacing the other. The VAT procedure has separate registration forms for applicants who are, and aren't, already registered for DST. The DST procedure says a non-resident already registered for VAT doesn't need a separate PAN (permanent account number). And the DST base is defined as the transaction value "excluding indirect tax charged in Nepal," which only makes sense if VAT is also on the invoice.

If you've read about the digital services taxes in the UK or France, Nepal's DST is a different animal. Those apply only to very large platforms. Nepal's applies to any non-resident past NPR 3 million a year, which a small SaaS company can reach.

What counts as an electronic service

Both taxes use the same idea of an electronic service: something delivered over the internet that is essentially automated, with little human involvement. The Act's definition (section 2(ट2), as amended in 2082) and the DST procedure list examples that include:

• software supply and updates, cloud services and mobile app services
• film, TV, music, streaming and other subscription services
• online gaming
• targeted online advertising and paid promotion
• online marketplace services, and supplies made through them
• downloads such as data and images
• online consultancy, skills development and training
• e-books, e-libraries and e-magazines (in the DST procedure's list)

If you're mapping this to Stripe, it lines up with what Stripe calls digital products, and with what other countries call electronically supplied services. Stripe says it "doesn't calculate tax for products that don't use a digital product tax code," so check the tax code on every product you sell into Nepal.

When a sale counts as a sale in Nepal

Both procedures list the facts that make a service supplied in Nepal. Any one is enough:

• the service is provided in Nepal
• the invoice goes to an address in Nepal
• payment comes through a Nepali bank or licensed payment provider
• the card used was issued in Nepal
• the customer's IP address is in Nepal
• the customer uses a Nepali SIM or landline number

Stripe works out the customer's location from its own evidence, which our place of supply entry explains. For the Denver company, a Nepali card on the subscription settles it under either list.

The NPR 3 million line, measured two ways

Both taxes start at NPR 3 million. They measure it differently, and the difference matters if your sales are near the line.

VAT: more than NPR 3 million in the past 12 months

Section 10ख1(1) requires a non-resident to register for VAT once its taxable electronic services in Nepal are more than NPR 3,000,000 over the past 12 months. That's a rolling window, and it matches Stripe's "3 million NPR in 12 months." The figure was NPR 2 million when the section was first added in 2079. The Finance Act, 2081 raised it, so older articles that quote NPR 2 million are out of date.

Once registered, you charge VAT on every sale, whatever the amount. The VAT procedure says so in section 3(ग).

DST: up to NPR 3 million a year is exempt, and above it everything is taxed

Section 23(1) of the Economic Act, 2083 exempts "annual transactions up to NPR 3 million." The year is Nepal's income year, which runs from 1 Shrawan to the end of Ashadh (mid-July to mid-July). The DST procedure is explicit about what happens above the line: once you pass NPR 3 million, the tax applies to "the entire transaction amount."

That's a cliff, not an allowance. NPR 2.9 million of annual sales means no DST. NPR 3.1 million means 2 percent of the whole NPR 3.1 million, which is NPR 62,000. If you're close to the line near the end of Ashadh, it's worth knowing which side you'll land on.

Business customers are out of both

Both taxes exclude sales to business users buying for business purposes. The VAT procedure, section 3(घ), says VAT isn't charged on "sales made through a digital interface to business users in Nepal for business purposes." The Nepali business accounts for VAT itself under section 8(2) of the Act. If a customer falsely claims business use, the procedure puts the liability on the customer. Section 23(1)(ख) of the Economic Act gives DST the same exclusion.

Two related points from the procedures:

• Stripe recognizes a Nepali PAN. Stripe's tax ID table lists np_pan (Nepal PAN Number) with "Yes" in the column "Impact in Tax Calculation." So once a customer's PAN is on file, Stripe treats the customer as a business and doesn't charge Nepal VAT. Stripe only checks the format of a PAN, not whether it's real. Botswana's bw_vat, by contrast, shows "No" in that column.
• Nepali businesses may withhold income tax from your invoice. The DST procedure says a business user paying for electronic services must deduct income tax under the Income Tax Act, 2058 when it pays. Card payments through Stripe don't leave room for that. A business paying an invoice by bank transfer might short-pay, though, and you'd see the gap as an open balance in QuickBooks. Ask the customer for the withholding certificate before writing it off.

Registering with the IRD

The two procedures set out near-identical registration routes. Both are online, and both are handled by the IRD's Large Taxpayer Office.

• When. For VAT, apply within 30 days of becoming liable. For DST, apply within 30 days of crossing the threshold. Voluntary registration is allowed for both.
• Documents to upload, each as a notarised English-language copy where it's a document:
  • your company registration certificate from your home country
  • your home-country tax registration certificate
  • a letter authorising a person to act for tax purposes, with that person's passport
  • the authorised person's photo and signature sample
  • if you appoint a Nepali citizen as your representative, the authorisation and their citizenship certificate
• A local representative is optional. Both procedures treat appointing a Nepali citizen as a choice ("if a representative has been appointed"), not a requirement.
• Processing. The office registers you and issues the certificate online within 7 days of receiving the application.
• Not registering. The VAT procedure allows a penalty of NPR 20,000 each time on a non-resident that doesn't register. For DST, the procedure says liability exists even if you never registered.

If you register for VAT first, you don't need a separate PAN for DST. You still file DST separately.

Once the VAT registration exists, add it in Stripe so Stripe starts charging VAT on Nepali consumer sales. Stripe's registration guide covers where to add it in the Dashboard. There's nothing to add in Stripe for DST.

VAT: 13 percent, every Nepali month, by the 25th

Section 7(1) of the Act sets "a single rate of 13 percent," and the VAT procedure repeats it in section 3(ख). Stripe's Nepal page doesn't state a rate, so check the rate Stripe applies on your first live Nepali invoice.

The tax period is a Nepali month

The VAT procedure defines the tax period as "each Nepali month." Nepali months don't line up with the Gregorian calendar. Each one starts somewhere in the middle of a Gregorian month. A return for Kartik, for example, covers roughly mid-October to mid-November.

That affects how you pull numbers from Stripe. Stripe's itemized tax export gives each line a transaction_date "in the requested timezone." Request it in Nepal's timezone and filter it to the first and last day of the Nepali month you're filing. A calendar-month export won't match the return.

The 25th of the following month

Section 7(क) of the VAT procedure says the return is due "by the 25th of the month following the end of the tax period," filed online. The payment goes online to revenue head 33316 (section 8(क)).

Penalties and interest

• A late return costs 0.05 percent of the tax per day or NPR 1,000 per tax period, whichever is higher (VAT procedure, section 7(ख)).
• Late payment carries interest at 15 percent a year under section 26 of the Act, plus an additional charge of 10 percent a year under section 19(2) (VAT procedure, sections 8(ख) and 8(ग)).

The exchange rate is the one on the day you file

This is where Stripe's numbers and the IRD's split. Section 6(ग) of the VAT procedure says that if you're paid in a foreign currency, you keep the period's figures in that currency and convert them to rupees at the Nepal Rastra Bank exchange rate "on the day the return is filed."

Stripe converts differently. Its tax reports documentation says that when your pricing currency differs from the filing currency, "Stripe Tax converts amounts using available exchange rates at the time of the transaction." The export's filing_tax_amount column uses those rates. So Stripe's NPR total is a good estimate, but it isn't the figure for the return. Take the dollar total and convert it once, at the central bank's rate on filing day.

Paying from abroad

The IRD documents say the payment goes online to revenue head 33316. They don't say how a company with no Nepali bank account makes that payment, or whether it can pay in dollars. Ask the Large Taxpayer Office when you register, and get the answer in writing before your first return is due.

DST: 2 percent, once a year, and it comes out of your margin

Section 23(1) of the Economic Act, 2083 imposes DST "at the rate of two percent" on the transaction value of electronic services a non-resident provides to users in Nepal. It also covers sales of data collected from users in Nepal.

You can't add it to the price

The DST procedure, section 3(ङ), says: "As this tax is a direct tax, it may not be collected by adding the tax amount to the sale price." It's a cost of selling into Nepal, like an income tax. Section 23(4) of the Act makes the trade-off explicit: income on which DST has been paid isn't taxed again under the Income Tax Act, 2058.

The base is the transaction value excluding indirect tax charged in Nepal (DST procedure, section 3(क)). Compute DST on your net sales, not on the VAT-inclusive total.

One return a year, within three months

Section 23(2) of the Act says the annual return and the tax are due within three months after the end of the fiscal year, filed online. With the year ending in mid-July, that's mid-October. The DST procedure adds that amounts must be stated in Nepali rupees and that you account on an accrual basis. It doesn't say which exchange rate to use for a year of dollar sales, so pick a method, document it, and confirm it with the Large Taxpayer Office.

Penalties

Section 23(3) of the Act sets three charges:

• a late-return fee of 0.1 percent of annual transaction value per year
• interest at 15 percent a year on tax not paid by the due date
• a penalty of 50 percent of any tax under-declared or concealed

The late-return fee is charged on your transaction value, not on the tax. A year late on NPR 3.8 million of sales costs NPR 3,800 before any interest.

An amnesty window that closes mid-December 2026

The IRD's information booklet on the Economic Act, 2083 describes a one-time waiver under section 49 of the Act. The booklet's own example is a non-resident that didn't file DST returns or underpaid the tax. If it pays the unpaid tax plus an extra 1 percent of that amount, and files the missed returns, by the end of Mangsir 2083 (mid-December 2026), the penalties, interest and fees are waived. The conditions are specific, so read them, or have an adviser read them, before relying on it. If you've been selling into Nepal above the line without filing, this is the cheapest moment to catch up.

Where Stripe stops

Here's what Stripe does and doesn't do for Nepal, from its own pages:

• Monitoring. Stripe tracks "B2C sales of digital products" against the 3 million NPR threshold. That's the VAT threshold. Stripe doesn't track the DST threshold, which runs on the Nepali income year rather than a rolling 12 months.
• Calculation. Stripe calculates VAT on digital products once you add the registration. It does that only for remote sellers: "To collect this tax on Stripe, you must be a remote seller without a physical presence in the country."
• Business customers. A Nepali PAN on the customer (np_pan) stops the VAT charge. Stripe checks the format only.
• DST. Stripe's Nepal page doesn't mention it. Nothing in Stripe calculates, reports or reminds you about it.
• Exchange rates. Stripe converts at transaction time. The IRD wants the central bank's rate on filing day for VAT.

A worked example: one VAT month and one DST year

The Denver company prices in dollars, exclusive of tax, and its QuickBooks Online home currency is the US dollar. The exchange rates below are illustrative, not real rates.

Crossing the VAT line. At 150 subscribers × $15, Nepal brings in $2,250 a month. At NPR 141 to the dollar, that's NPR 317,250 a month, so the rolling 12-month total passes NPR 3,000,000 during the tenth month. The company registers within 30 days and adds the registration in Stripe. From then on, Stripe charges 13 percent on Nepali consumer sales.

One VAT month after registration. In Mangsir:

• Sales: 150 × $15 = $2,250.00, plus VAT of $292.50.
• One subscriber cancels and gets a full refund through a credit note: $15.00 plus $1.95 of VAT.
• Net VAT for the month: $292.50 minus $1.95 = $290.55.
• On filing day in Poush, the Nepal Rastra Bank rate is 141.20, so the return shows NPR 41,025.66 ($290.55 × 141.20).
• The company's bank sells it NPR at 140.50, so paying NPR 41,025.66 costs $292.00.

The DST year. For the fiscal year, Nepali sales come to $26,970.00 (twelve months of $2,250 less two $15 refunds). That's net of VAT, so it's the DST base. Using an average rate of 141, that's NPR 3,802,770.00, which is over NPR 3 million, so the whole amount is taxable. DST is 2 percent: NPR 76,055.40, or about $539.40. It's due, with the annual return, within three months of the year end.

Had the year's sales been NPR 2.9 million, the DST would have been zero. The company still owes VAT on sales after its VAT registration either way, because the two lines are measured separately.

What reaches QuickBooks, and what you book yourself

Acodei offers two main approaches for syncing Stripe Tax amounts into QuickBooks.

• The tax product approach. All Stripe Tax amounts roll into a single line item on the QuickBooks invoice or sales receipt, using a non-inventory product (for example "Sales Tax") mapped to a liability account. You then use the Stripe Tax report to file with each tax authority and pay from that liability account. It needs Stripe Tax enabled with Stripe Invoicing or Stripe Checkout. For QuickBooks companies in the US it's usually the only workable method, because the QuickBooks Sales Tax Center doesn't let third parties create tax rates. Companies outside the US can use it too.
• QuickBooks tax rate mapping. This is for QuickBooks companies outside the US. You map each Stripe tax rate ID (txr_...) to a QuickBooks tax code.

Both are set in the Stripe Tax section of the Account Mapping module in Acodei, behind the toggle "Do you need to track Stripe Tax?", next to the setting for inclusive or exclusive tax. The Denver company has a US QuickBooks Online file, so it uses the tax product approach. The liability account holds US sales tax and every country's VAT together, so use Stripe's export, filtered to Nepal and to the Nepali month, to find the IRD's share.

VAT

• Sales. The Nepal VAT on each month's invoices sits in the liability account in dollars, at Stripe's amounts.
• The refund. It went through a credit note, so Acodei can see the line-level tax breakdown. A refund made against the payment alone, without a credit note, doesn't carry that breakdown, and the tax on it may need a manual adjustment in QuickBooks.
• Daily summary or real time. In daily summary mode, Acodei writes one summary transaction per day and splits lines by product and tax rate. In real-time mode, each Stripe invoice or charge gets its own QuickBooks record. That's easier to trace if the IRD asks about a specific sale.
• The payment to the IRD. This one is yours to record. Debit the tax liability account $290.55, debit exchange gain or loss $1.45, and credit the bank $292.00. Book any wire charges as a bank fee, not against the liability.

After each monthly payment, the Nepal slice of the liability account should be close to zero. If it keeps growing, look first at payment-only refunds and at invoices that were never paid. Our guide to reconciling the Stripe Tax report in QuickBooks walks through that check.

DST

Acodei syncs the tax amounts Stripe Tax calculates. Stripe doesn't calculate DST, so no DST line ever reaches QuickBooks from Stripe. Treat it as an expense you accrue yourself, not as a liability that customers funded:

• Monthly accrual. Once you expect to pass NPR 3 million for the year, accrue 2 percent of each month's net Nepali sales: $45.00 a month in the example. Debit an expense account such as "Foreign digital service tax," and credit a liability account such as "Nepal DST payable."
• If you end the year under the line, reverse the accrual. Because of the cliff, there's no partial amount.
• At filing, true the payable up to the rupee figure you actually pay. For the example, accrued $540.00 against a $539.40 liability at 141 means a $0.60 reversal before the payment, plus any exchange difference on the day you pay.

Don't put DST in the same account as the Stripe Tax product. That account should hold only tax your customers paid. Mixing in a tax your business pays makes the Stripe Tax report impossible to reconcile against it.

Ask your tax adviser whether the DST is creditable against US tax. That depends on your own tax position, not on anything in Stripe or QuickBooks.

If you price Nepali customers in rupees

Stripe's currencies page lists NPR as a presentment currency. It's a two-decimal currency, because Stripe says "Currencies are two-decimal currencies unless otherwise specified," and NPR isn't on the zero-decimal or special-case lists.

On the QuickBooks side, rupee sales mean QuickBooks multicurrency has to be on, and once it's turned on in QuickBooks it can't be turned off. Acodei's Multicurrency Support and Invoice Multicurrency aren't self-serve switches: the Acodei team enables them for your account on request. With Multicurrency Support on, when a Stripe transaction's currency doesn't match the QuickBooks customer's currency, Acodei creates a separate customer named in the format "Acme - NPR." That's how QuickBooks is designed: a customer record carries a single currency, so a buyer who pays in two currencies needs two records. Exchange rates come from Stripe when it provides one, and otherwise from QuickBooks. Acodei doesn't support zero-decimal currencies such as JPY, but that doesn't affect NPR. The multicurrency feature page covers the setup.

Rupee pricing doesn't change the VAT filing rule. The IRD still wants the period converted at the central bank's filing-day rate when you were paid in foreign currency, and a rupee price doesn't change how you settle the tax.

Common mistakes with Nepal tax on Stripe sales

• Filing VAT and forgetting DST. Stripe handles one and never mentions the other. They have separate returns, separate deadlines and separate thresholds.
• Adding DST to the customer's price. The procedure forbids it. It's your cost.
• Using the NPR 2 million figure. It was raised to NPR 3 million for VAT in 2081, and the 2083 Act uses NPR 3 million for DST.
• Assuming DST taxes only the excess. Above NPR 3 million, it taxes the whole year's sales.
• Filing VAT from a calendar-month export. The tax period is the Nepali month.
• Filing Stripe's NPR total as it is. The return uses the Nepal Rastra Bank rate on filing day, not Stripe's transaction-date rates.
• Booking DST through the Stripe Tax product. It isn't customer-paid tax, and it'll break the reconciliation.

Frequently asked questions

Do foreign SaaS companies have to register for VAT in Nepal?

Yes, once their taxable electronic services to users in Nepal are more than NPR 3,000,000 over the past 12 months. That's section 10ख1 of the Value Added Tax Act, 2052. Registration is an online application to the IRD within 30 days, with notarised English copies of your home-country company and tax registrations. Sales to Nepali businesses buying for business use don't count toward the line.

What is the VAT rate on digital services in Nepal?

13 percent. Section 7(1) of the Value Added Tax Act sets a single rate of 13 percent, and the IRD's procedure for non-residents applies it to electronic services. A $15 plan priced exclusive of tax carries $1.95 of VAT.

What is Nepal's digital service tax?

It's a separate 2 percent tax on the value of electronic services a non-resident provides to users in Nepal, imposed each year by the Economic Act (section 23 in 2083). Annual sales up to NPR 3 million are exempt. Above that, the whole year's sales are taxed. It can't be added to the customer's price, and the annual return and payment are due within three months after Nepal's fiscal year ends in mid-July.

Does Stripe calculate Nepal's digital service tax?

No. Stripe's Nepal page covers VAT only: it monitors the 3 million NPR threshold for B2C digital sales and calculates VAT once you add your registration. DST doesn't appear anywhere in Stripe, so you track the threshold, file the return and book the expense yourself.

How often do non-residents file Nepal VAT returns?

Every Nepali month. The return is due by the 25th of the following Nepali month, filed online, and the tax is paid online to revenue head 33316. Foreign-currency amounts are converted at the Nepal Rastra Bank rate on the day you file.

The short version

Nepal taxes foreign digital services twice. VAT at 13 percent applies once you pass NPR 3 million over a rolling 12 months. Stripe can monitor and calculate it, and you file it every Nepali month by the 25th, converted at the central bank's rate on filing day. DST at 2 percent applies to the whole year's sales once you pass NPR 3 million in Nepal's fiscal year. Stripe doesn't touch it, you can't pass it on, and it's due within three months of mid-July. Sales to Nepali businesses are outside both.

In QuickBooks Online, the VAT lands in your tax liability account through the Stripe Tax product. Split out Nepal's share from Stripe's export and record the payment yourself. Book DST as an expense in its own accounts.

To get Stripe's tax lines into QuickBooks without retyping them, start a free trial of Acodei, or read more about the Stripe to QuickBooks integration.