10 Essential Questions About TIN in Nepal

In Nepal, the Tax Identification Number is universally known as the PAN (Permanent Account Number).

It is a unique 9-digit numeric code assigned to all taxpayers—individuals, businesses, and proprietary firms. It serves as the single identifier for Income Tax, VAT, and Excise Duty.

Nepal uses a unified PAN system, but the category of the holder determines the tax liability.

• Business PAN: Assigned to companies and partnership firms. Essential for VAT registration.

• Individual PAN: Assigned to natural persons. Mandatory for anyone earning a salary above a certain threshold or professionals (doctors, engineers).

• Personal PAN (PPAN): The specific term for individual salary earners.

• National Identity Number (NIN): A newer biometric ID (Rastriya Parichaya Patra) being rolled out, though PAN remains the primary tax key.

The format is strictly numeric and standardized across all entity types.

• PAN (Business & Individual): A strictly 9-digit numeric string.

  • Structure: The number is generated sequentially but includes a check digit at the end.

  • Example: 300123456 (Business) or 100123456 (Individual).

Technical Note: The 9th digit of the PAN is not random. It is a Check Digit derived from a specific mathematical algorithm used by the IRD. If your payroll or vendor system records a PAN with a typo, the tax server will reject your TDS return immediately. TaxDo’s Global Syntax Verification (GSV) processes this internal validation logic to ensure the PAN is mathematically plausible before you process any payments.

The Inland Revenue Department (IRD), under the Ministry of Finance, issues the PAN. The Department of National ID and Civil Registration (DoNIDCR) issues the NIN.

• Local Businesses: Mandatory for any economic activity.

• VAT Threshold:

  • Goods: Mandatory if annual turnover exceeds NPR 5 million.

  • Services (or Mixed): Mandatory if annual turnover exceeds NPR 2 million.

  • Rate: The standard VAT rate is 13%.

• Foreign Digital Services (DST): Non-resident providers of digital services (advertising, cloud, software) to Nepali consumers must register for PAN and pay a 2% Digital Service Tax (DST) on the transaction value.

• Salaried Employees: Mandatory for any individual receiving a salary to ensure TDS is credited to their account.

The process differs significantly for locals versus foreign digital service providers.

Step 1: Local Application (IRD Portal)

• Portal: Visit the Inland Revenue Department (IRD) website.

• Action: Fill out the online application form for a Personal or Business PAN.

• Outcome: You receive a Submission Number.

Step 2: Verification (Physical Visit)

• Requirement: For locals, the process is not fully digital.

• Action: Visit the local Taxpayer Service Office (TSO) with your Submission Number and citizenship documents for Biometric Verification (photo and fingerprints).

• Outcome: You receive your 9-digit PAN Card immediately.

Step 3: Foreign Digital Services (DST Registration)

• Context: For non-resident tech companies (Google, Facebook, SaaS).

• Portal: Use the dedicated DST Portal on the IRD website.

• Action: Upload incorporation documents and appoint a contact person. No physical presence or local representative is required.

• Outcome: You are issued a PAN specifically for filing DST returns.

Verification is critical because TDS (Tax Deducted at Source) is the primary method of tax collection in Nepal.

• The Manual Way:

  • Search Taxpayer: The IRD website provides a "Search Taxpayer" facility where you can enter the PAN to see the name and status.

• The Scalability Gap: The official portal often faces downtime, uses CAPTCHA, and the interface can switch between English and Nepali unexpectedly. It is not built for automated KYB checks.

• The Solution: TaxDo’s Tax ID Validator connects to official registry logic to verify the Business PAN status instantly.

TaxDo delivers a regulatory-grade Global TIN Validation platform, essential for the evolving Nepali market.

Why Leading Platforms Choose TaxDo:

• Official Global TIN Lookup (125+ Countries): Real-time validation via IRD logic to confirm if the Business PAN is active.

• VAT vs PAN Distinction: Checks if the PAN is registered for VAT (13%), which is crucial for B2B invoicing.

• NIN Readiness: Prepares your systems for the upcoming integration of the National ID (NIN).

• Enterprise-Ready: Features automated revalidation and bank-grade security.

Nepal Coverage Overview

We cover the complete spectrum of Nepali identifiers required for compliant onboarding:

A valid PAN is the lifeblood of business operations in Kathmandu. Here is how it is used:

The penalties for non-compliance are strictly enforced by the IRD:

• TDS Disallowance: Expenses paid to a vendor without a valid PAN are disallowed as business expenses, effectively increasing your taxable income by that amount.

• Fines: Failure to issue a VAT invoice or issuing one with an invalid PAN attracts fines of NPR 10,000 per instance or 100% of the tax amount.

• Customs Blockage: Shipments are held at the border (Birgunj/Tatopani) if the EXIM Code/PAN is inactive.