VAT 5%

Finance Act 2083 introduced a reduced five percent VAT rate for ride-sharing services and electricity supply. A business that bills these must charge 5 percent instead of 13, and the IRD VAT Return reports the taxable value in its own column. BRAccount provides the template VAT 5% (Ride Share / Electricity) - YFF and the tax categories Nepal VAT 5% Sales and Nepal VAT 5% Purchase; a Tax Rule maps the category to the template, so a customer tagged with the category gets the right rate on every invoice without anyone remembering. Applying 13 percent to a five percent supply overcharges the customer and overstates output VAT; applying 5 percent to an ordinary sale undercharges the IRD.

VAT = Taxable value x 5%; a Rs 1,000 fare carries Rs 50 of VAT.

1. 01Go to Selling > Customer, open the customer and set Tax Category to Nepal VAT 5% Sales.
2. 02Or pick VAT 5% (Ride Share / Electricity) - YFF in the template field on the invoice itself.
3. 03Go to Invoicing > Sales Invoice > New for that customer; the 5 percent template fills by Tax Rule.
4. 04Enter the fare or electricity charge; the Taxes table shows 5 percent.
5. 05Submit. The entry above posts and the sale appears in the 5 percent column of the VAT Return.

Choose the VAT 5% template or set the customer's tax category to Nepal VAT 5%.

A Rs 1,000 ride-share fare carries Rs 50 of VAT.