2083 VAT Regulations for Ride-Sharing in Nepal
The Inland Revenue Department of Nepal has introduced new Value Added Tax (VAT) regulations for ride-sharing platforms for the year 2083. This essential update clarifies tax duties to make compliance easier for everyone involved. The biggest takeaways include a mandatory 5% tax collected by platforms on driver fares, a 13% VAT on the platform's own commission, and a strict requirement for all drivers to obtain a Permanent Account Number (PAN). Thankfully, individual drivers do not need to register for VAT themselves. Read on to see exactly how these billing formats and tax rules impact platforms and riders alike.
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- 21 Jul 2026
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- 21 Jul 2026
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Overview of the New VAT Regulations for Ride Sharing Services
The Inland Revenue Department under the Ministry of Finance, Government of Nepal, has published a public notice regarding Value Added Tax for ride sharing services for the year 2083. Based on a decision made on 2083/03/31, the Finance Act 2083 added a new subsection to the Value Added Tax Act 2052 to simplify tax compliance and ensure transparency in the ride sharing sector.
Here is a simplified breakdown of the new rules and requirements for both platforms and riders.
Key Guidelines for Ride Sharing Platforms:
VAT Registration Requirement: Any individual or company operating a ride sharing platform must be registered for Value Added Tax.
5% Tax Collection on Rides: When a rider provides transport or delivery services, the platform must determine and collect a 5% tax on the taxable amount for that service on behalf of the rider.
Income Separation: The income reflected on the 5% tax invoice does not belong to the ride sharing platform.
Monthly Tax Submission Deadline: The platform is required to submit the collected tax and the corresponding details to the respective tax office by the 25th day of the following month.
No Input Tax Credit: Platforms are not allowed to claim an Input Tax Credit for the tax they collect and submit on behalf of the riders.
13% Tax on Platform Commissions: When the platform earns commissions or service fees from the riders, it must collect a 13% Value Added Tax. For these regular business transactions, standard VAT rules apply.
Important Rules for Riders (Drivers):
Mandatory PAN: Individuals providing transport or delivery services through these platforms must obtain a Permanent Account Number.
VAT Exemption: Riders are not required to register for Value Added Tax.
Billing and Invoice Formats:
To keep transactions clear, platforms are required to use two distinct invoice formats.
Format A (For the Ride): Platforms must issue a specific tax invoice on behalf of the rider for the transport or delivery service provided, which clearly shows the 5% tax applied.
Format B (For the Platform's Fee): For their own regular business operations, such as charging commissions to the riders, platforms must issue a separate invoice reflecting the standard 13% tax.