Businesses often start thinking about tax clearance only when a bank, tender, regulator or counterparty asks for it. A better approach is to maintain the business in a clearance-ready condition throughout the year.
What to review before applying
- Income-tax returns for required years.
- VAT returns if the taxpayer is VAT registered.
- TDS/withholding filings and payments where applicable.
- Outstanding assessments, interest or penalties.
- Consistency between turnover in accounts and tax filings.
- Bank and sales records supporting declared income.
Reconcile before you submit
Do not discover during the clearance process that your audited financial statements, VAT sales, TDS records and income-tax return all show different numbers without an explanation. Prepare a reconciliation and supporting schedule first.
Keep an evidence file
Store submitted returns, payment vouchers, correspondence, financial statements and major reconciliations in one place. When an old period needs to be reviewed, a complete digital file can save days of reconstruction.
Always check the current fiscal-year rules
Nepal’s tax rules can change through annual finance legislation. For current rates, thresholds, concessions and procedural changes, verify the applicable law and the latest IRD/MOF materials rather than relying on an old article.
Frequently asked questions
Is tax clearance just a certificate request?
Usually the certificate is the end of the process, not the beginning. The business should first ensure required returns, tax payments and records are consistent for the relevant period.
Why can tax clearance get delayed?
Common reasons include missing returns, unpaid liabilities, mismatches between filings and accounts, or unresolved tax-registration issues. The exact status should be checked with IRD.
Official sources & further reading
Rules, thresholds, rates and filing processes can change. Check the current law and official portal before relying on an older guide.
Need help applying this to your business?
General guidance is useful for understanding the issue. Your actual records, registrations and circumstances may require a different treatment.