Kathmandu, July 22, 2024 — The Government of Nepal has announced significant updates to the Value Added Tax (VAT) regulations with the publication of the Forty sixth Amendment to the VAT Rules, 2081, in the Nepal Gazette. The amendment introduces revisions to Schedule5, Schedule5A, and Schedule6, which pertain to the formats for tax invoices and summary tax invoices.
Key Changes to Tax Invoice Formats
Under the new regulations, there are substantial changes to the tax invoice formats outlined in:
- Schedule5 (Subrule (1) of Rule 17): Standard Tax Invoice Format
- Schedule5A (Subrule (1a) of Rule 17): Simplified Tax Invoice Format
- Schedule6 (Subrule (1) of Rule 18): Summary Tax Invoice Format
What’s New?
1. HS Code Requirements: Tax invoices must now include the minimum first four digits of the Harmonized System (HS) code, along with the model and brand of the item as declared in customs. This new requirement aims to streamline tax administration and ensure greater accuracy in tax reporting and compliance.
2. Software Update Mandate: All software vendors registered for Computer Billing are required to update their systems to support the new tax invoice format. This update must reflect the HS code and other specified details in the tax invoices.
3. Mandatory Use of New Format: Taxpayers are instructed to use the updated tax invoice formats that include the HS code, model, and brand information. This change is designed to enhance transparency and efficiency in VAT processes.
Action Required from Taxpayers and Software Vendors
For Taxpayers: Ensure that all future tax invoices are issued using the new formats that include the HS code, model, and brand information.
For Software Vendors: Update your billing software to incorporate the new tax invoice format as per the revised regulations. This update is crucial for compliance and effective tax reporting.
Sample Formats Provided
To assist with the transition, the government has published sample formats for the new tax invoice and summary tax invoice. These samples can be accessed through the Nepal Gazette and are also available from the Department of Taxation’s official website.
Official Statement
A spokesperson from the Department of Taxation stated, “These amendments are part of our ongoing efforts to improve VAT administration and ensure that our tax system remains robust and transparent. We urge all stakeholders to familiarize themselves with the new requirements and make the necessary adjustments to their invoicing practices and software systems.”
For further information and to view the sample tax invoice formats, taxpayers, and software vendors are encouraged to visit the Department of Taxation’s website or contact the nearest tax office.
