The withholding tax ('WHT') rates levied on income received / derived by the non-residents from sources within Nepal, unless reduced under a tax treaty, are as below:
Dividend
Tax is withheld at 5% on dividends paid by Nepal resident entities to non-residents.
Interest
Tax is withheld at 15% on interest paid by Nepal resident entities to non-residents.
Royalty Copyright
Tax is withheld at the rate of 15% on royalties paid to non-residents.
Royalty Patent
Tax is withheld at the rate of 15% on royalties paid to non-residents.
Royalty Trademark
Tax is withheld at the rate of 15% on royalties paid to non-residents.
Service Management
Tax is withheld at the rate of 15% on service management fees paid to non-residents.
Service Technical
Tax is withheld at the rate of 15% on service technical fees paid to non-residents.
Other
Tax is withheld at the rate of 15% on income derived by non-residents from rent, commissions, bonus and windfall gains, and at the rate of 5% on income derived by non-residents from contract payments in Nepal. Premiums paid to non-resident insurance companies as well as commissions paid with respect to reinsurance attract withholding tax at the rate of 1.5%. Capital gains derived by non-residents on the disposal of listed or unlisted shares are assessable to tax at 25%.
Below is a discussion of domestic withholding tax rules for most of the common cross border payments.
| Capital Gains |
25%
|
| Dividends |
5%
|
| Interest |
15%
|
| Royalty Copyright |
15%
|
| Royalty Patent |
15%
|
| Royalty Trademark |
15%
|
| Sales |
0%
|
| Service Management |
15%
|
| Service Technical |
15%
|
* Rates are current as of 19 March 2023