background image
5.1. Tax Base for Resident Entities

Resident entities are taxed on their worldwide income earned from within and outside Nepal.

Capital gains are subject to tax as ordinary income. To the extent taxable in Nepal, losses arising from disposal of capital assets attributable to overseas activities may only be set off against capital gains arising from overseas activities.

Dividend income received by a resident company from another resident company is subject to a final withholding tax at the rate of 5% and consequently excluded from the taxable base of the recipient.