IT & freelance export tax calculator
Work out the 5% final tax on foreign-currency IT, software and freelance export income under Finance Act 2082, from your monthly or annual earnings.
See the tax due and the net amount you retain. An indicative tool, computed entirely in your browser.
Export income
Foreign-currency IT/software-service export income, already converted to NPR at the bank's exchange rate.
The 5% final tax rate is the same for both; this only changes how the result is described below.
Final tax (5%)
Rs 25,000
On Rs 5,00,000 of annual export income, as an individual/freelancer
Net retained
Rs 4,75,000
Annual gross income
Rs 5,00,000
Tax rate
5% (final)
Net retained
Rs 4,75,000
An indicative estimate, as of Finance Act 2082 (FY 2082/83). This 5% rate is a final tax: no deductions are allowed against it, and once paid no further income tax is due on this export income under this regime. Separately, the general income-tax regime offers a 75% rebate on tax otherwise payable on income from exporting IT-enabled services, which can work out cheaper or costlier depending on your other income and expenses. This calculator does not compute that alternative, compare both options with an accountant before choosing.
From export income to final tax
Finance Act 2082 sets a flat, final 5% tax on qualifying foreign-currency IT-enabled services export income, in place of ordinary slab-rate taxation on that income.
Gross income
Enter your foreign-currency IT/software export income, already converted to NPR at the bank's rate, monthly or annual.
Flat 5% tax
Tax = gross income × 5%. No deductions are allowed against this base, it is a final tax on the full gross amount.
Net retained
Net retained = gross income − tax. Once paid, no further income tax is due on this income under the final-tax regime.
IT export tax, answered
Who qualifies for the 5% final tax on IT export income?+
Nepali freelancers, individual consultants and registered companies who earn foreign-currency income from exporting IT-enabled services, such as software development, BPO, data processing or digital design, qualify, provided the payment is received in convertible foreign currency through a bank or a recognised payment service provider (PSP) like Payoneer or Wise, and repatriated into Nepal.
Is the 5% rate mandatory, or can I choose a different regime?+
The 5% final tax under Finance Act 2082 is the default treatment for qualifying IT-enabled services export income. A separate general-regime option also exists, a 75% rebate on the tax otherwise payable on such export income, which can be more favourable depending on your total income and deductible expenses. Whether you can elect between the two, and which is cheaper, depends on your specific filing status, discuss this with a tax accountant before deciding.
Does VAT apply to IT/software export income?+
No. Exported services, including IT-enabled services billed and paid for by a foreign client, are zero-rated for VAT purposes in Nepal. You do not charge or collect VAT on this export income, though you may still need to register for VAT if your total turnover crosses the registration threshold, and zero-rated exports are typically reported at 0% VAT on your VAT return.
What does 'final tax' mean here?+
A final tax is deducted or paid once and settles your entire income-tax liability on that income; it is not an advance or a withholding credited against a further year-end computation. Once you pay the 5% on your qualifying export income, no additional income tax is due on that same income, and it is not added to your other income for slab-rate taxation.
Can I deduct business expenses before applying the 5% rate?+
No. Under the final-tax regime, the 5% is applied to your gross foreign-currency export income, no deductions for equipment, internet, subcontractor payments or other business costs are allowed against this specific tax base. If your deductible expenses are large relative to your income, compare the outcome with the general regime's 75% rebate option, which is expense-and-slab based, with an accountant.
Do I still need to file an income tax return?+
Generally yes, freelancers and companies are still expected to register with the Inland Revenue Department, maintain records of foreign-currency receipts and file the applicable return each year, even where a specific stream of income is taxed finally at 5%. Keep your bank/PSP remittance certificates as evidence of the export income and the source of funds.
Sources & data note
Based on Finance Act 2082's final-tax provision for income from the export of IT-enabled services, a flat 5% on gross foreign-currency export income with no deductions. A separate 75% rebate on tax payable under the general regime also exists for the same underlying export income; this calculator does not compute that alternative. Figures here are indicative, verify your specific treatment with a tax accountant or the Inland Revenue Department.