VAT

Value Added Tax is charged at each step of the supply chain, but each business only hands over the tax on the value it added. You add 13 percent to your taxable sales and collect it from customers; that is output VAT and it is not your income, it belongs to the IRD. You also pay VAT on purchases from registered suppliers; that is input VAT and you may set it off. Each Nepali month you remit the difference within 25 days of the month end. Registration is compulsory above the turnover threshold and for many service lines, and once registered every sale needs a tax invoice. Spending collected VAT is the fastest way into IRD penalties.

VAT on a line = Taxable value x 13%; Net VAT payable for the month = Output VAT - Input VAT.

1. 01Go to Invoicing > Sales Invoice > New and add the item at its taxable value.
2. 02The Sales Taxes and Charges Template fills as VAT 13% - YFF; the VAT line computes itself.
3. 03Submit. Output VAT credits VAT Payable and the invoice is sent to CBMS.
4. 04Post supplier bills through Invoicing > Purchase Invoice with the VAT template so input VAT debits VAT Receivable.
5. 05After the Nepali month ends, open Nepal IRD > VAT Return and read the net figure.
6. 06Pay the net amount and file within 25 days; post the payment by Journal Entry against VAT Payable.

BRAccount applies the rate by rule on each invoice line and posts it to VAT Payable or VAT Receivable.

A Rs 32,000 sale carries VAT Rs 4,160 (13%), giving a bill of Rs 36,160.