Nepal Grants VAT Waiver Facility to International Airline Service Providers

The Government of Nepal has announced a significant relief measure for international airline service providers and their ticketing agents operating in Nepal. As part of the Budget Statement for Fiscal Year 2082/83 (2025/26), the Ministry of Finance introduced an arrangement under Point No. 400 that offers a one-time waiver on interest, penalties, and additional fees associated with outstanding Value Added Tax (VAT) dues for international airline service providers and their ticketing agents operating in Nepal.

Key Points:

1).  Eligible Entities: International airlines and individuals/agents involved in the sale of international air tickets in Nepal.

2). Relief Offered: Full waiver on interest, additional fees, and penalties upon payment of the principal VAT due.

3). Conditions: Entities must be registered (or become registered) for VAT and settle dues within the timeframe prescribed by the Inland Revenue Department (IRD).

Explanation

The waiver arrangement allows eligible international airline service providers and ticketing agents that have unpaid VAT liabilities to regularize their tax status by paying only the outstanding principal amount. Once the principal is settled, the associated financial burdens of interest, late fees, and penalties will be fully waived, provided the taxpayer is registered under VAT and complies with the IRD prescribed procedures and timelines.