Tax Law

Bhandari Law specializes in tax law in Nepal, advising businesses and organizations on all aspects of their tax obligations. Our team consists of lawyers who understand the complex legal mechanics of how tax actually gets assessed, disputed, and litigated in Nepal — not just the headline rates a business needs to pay.

 

The Legal Framework

Nepal's tax system runs on a layered statutory structure: the Income Tax Act, 2058 (2002) as the principal direct-tax statute, the Value Added Tax Act, 2052 (1996) governing VAT, the Excise Duty Act, 2058 (2002), the Customs Act, 2064 (2007) for cross-border transactions, and the Revenue Tribunal Act, 2031 (1974), which establishes the specialist forum where most tax disputes are ultimately resolved. Tax rates and thresholds themselves are revised annually through the Finance Act, so what applied last fiscal year isn't a safe assumption for this one.

 

Tax disputes in Nepal follow a defined procedural sequence worth understanding before a matter ever reaches a tribunal. When the Inland Revenue Department issues an assessment following an audit or desk review, the taxpayer has 30 days to file an administrative review under Section 115 of the Income Tax Act — an internal mechanism where the Department reviews its own assessment. If that review doesn't resolve the matter, the taxpayer can appeal to the Revenue Tribunal under Section 116, and that appeal carries a real financial condition attached to it: the taxpayer has to submit the undisputed portion of the assessed tax in full, and either deposit 50% of the disputed tax, charge, and fine amount or provide a bank guarantee for that sum — a requirement that shapes litigation strategy from the outset, since the cost of appealing isn't purely the legal fee. A copy of the appeal petition also has to be registered with the Department within 15 days of filing at the Tribunal. From the Revenue Tribunal, a further appeal on points of law lies to the Supreme Court of Nepal.

 

What We Do

 

Tax litigation strategy

We handle tax cases from the earliest stage and formulate the litigation strategy appropriate to each — a decision about whether to pursue administrative review, go straight to appeal, or settle often has to be made early, given the deposit requirements attached to a Revenue Tribunal appeal.

 

Representation before tax and appellate authorities

We regularly appear before the tax authorities, the Revenue Tribunal, and the courts on tax matters.

 

Investigation and quasi-judicial proceedings

We assist clients from the stage of tax investigation through proceedings before quasi-judicial authorities, managing the process before it escalates into full litigation where possible.

 

Representation before the High Court and Supreme Court

We represent clients in tax matters that proceed to the High Court and, on points of law, before the Supreme Court of Nepal.

 

Who We Represent

We assist clients across a wide range of sectors — information technology, telecom, aviation, private equity, media, investment firms, non-profit organizations, infrastructure, pharmaceutical, travel, railways, hospitality, real estate, education, renewable energy, and food and beverage, among others. That range means we've generally already seen the particular tax questions a given sector tends to raise, whether that's VAT treatment for a specific service type or the tax implications of a cross-border investment structure.