What is tax year or income year in Nepal?
Nepal follows Vikram Sambat for all government purposes, including tax purpose. The year is almost 56.7 years ahead of the English calendar.
Nepalese tax year begins from 1st day of fourth month of the year (Mid July each year) and completed on last day of third month of next year (Mid July next year), as per Vikram Sambat calendar. The exact day depends on days in Nepalese months which might differ each year.
The income year may be a period less than twelve months. However, it can never be more than twelve months.
For first year of your operation, the year begins from date of registration in tax office and concludes on next mid-July.
For e.g., if you register on 1st August 2023, your first income year would be 1 Aug 2023- 15 July 2024.
Note that income year is fixed in Nepal and you cannot choose a different reporting period for tax or corporate reporting. This means if balance sheet date of parent company is 31st December, then the balance sheet date of subsidiary in Nepal would still be around 15 July (the date that correspondents to Ashad end).
You need to follow Vikram Sambat calendar for all legal compliance purpose, for e.g. tax and VAT returns, company office reporting, communication with courts etc. But this is not as difficult as it seems. Accounting software used in Nepal normally provides option for accounting in both Nepali and English dates so that you can generate reports using either of the calendar.
There are several online calendars that provide dates in English and Nepali or can convert dates. One of the easy to use calendar is Hamropatro.