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Basis of levying tax on income of foreign citizen in Nepal

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What is the basis of tax in Nepal for a foreign citizen?

This question discusses the basis on which tax can be levied on income of a foreign citizen. The Nepalese tax law is applicable throughout Nepal, and to all resident persons, irrespective of where they may be living outside Nepal.  

Citizenship of Nepal is not a predetermining criterion for levying tax on employment; neither the law differentiates between a foreign citizen and a Nepalese citizen.  

This means:  

 A Nepali Citizen and a Foreign Citizen is taxed in the same way in Nepal, if both of them are resident or non-resident.  

The question of a person’s residence is important in that it will determine the extent to which it is within the charge to Nepalese income tax.  

The tax incidence is based on tax status, as shown in the table below:   

Tax Status  Nepal Sourced Income  Foreign Sourced Income 
Resident   Taxable   Taxable  
Non-resident   Taxable   Non-Taxable  

A resident person is subject to tax on global income in Nepal, whereas a non-resident person is subject to tax on Nepal sourced income. In practice, the authorities are not seen assessing tax only on employment tax on expatriates in Nepal.  

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