Tax Clearance Certificate (Kar Chukta Pramanpatra) in Nepal — How to Get It

A tax clearance certificate — kar chukta pramanpatra (कर चुक्ता प्रमाणपत्र) in Nepali — is an official document issued by the Inland Revenue Department (IRD, आन्तरिक राजस्व विभाग) certifying that a taxpayer has filed every required tax return and paid every outstanding tax liability up to a stated fiscal year. It is proof of compliance, not a measure of income: even a person or company with zero taxable income can hold a valid certificate as long as their returns are filed and no dues remain.

The certificate is grounded in the Income Tax Act 2058 (2002 AD), which governs assessment, filing and clearance of income tax in Nepal, together with IRD administrative procedures. A tax clearance certificate is generally requested for a specific fiscal year and confirms that, for that period, the taxpayer's account with the IRD shows nothing outstanding.

In practice the certificate ties together several tax streams a taxpayer may be liable for — income tax, value added tax (VAT) where registered, and tax deducted at source (TDS/withholding). The IRD will only clear a taxpayer once returns across all applicable streams are filed and reconciled, which is why the document carries weight with banks, embassies and procuring agencies.

The certificate is one of the most frequently requested compliance documents in Nepal because so many transactions and approvals hinge on demonstrating that your taxes are in order. Contractors and firms bidding for government work, individuals heading abroad for jobs or study, and companies renewing licences all commonly need a current certificate.

For public procurement, a valid tax clearance certificate for the relevant fiscal year is a standard eligibility requirement in tenders and bids, consistent with the Public Procurement Act 2063. Missing or expired certificates are a routine reason bids are declared non-responsive, so contractors typically renew each year as returns are filed.

The certificate is issued only after you are fully compliant, so most of the effort is in the preparation, not the application. There is no shortcut around unfiled returns or unpaid dues — the IRD verifies your account before issuing, and any gap causes rejection.

Nepal's fiscal year runs from Shrawan 1 to Ashad end (roughly mid-July to mid-July). Income tax returns are due within three months of the fiscal year's end (around mid-October / Ashoj end), with a common extension to around mid-January (Poush end); returns are filed on a self-assessment basis, meaning you compute and pay the tax before filing. Make sure every year up to the one you need cleared is filed and paid.

Most applications are handled online through the IRD Taxpayer Portal at taxpayerportal.ird.gov.np, with the option to complete the process at your registered Inland Revenue Office (IRO) or Taxpayer Service Office (TSO) where a case needs manual review. You log in with your PAN and password; first-time users must register on the portal using their PAN details before applying.

For salaried individuals with a single employer whose tax is fully covered by TDS, the portal can generate a personal tax clearance declaration and issue a QR-coded certificate largely automatically, provided the withholding covers the liability. For businesses, partnerships and companies, you submit the request and the IRD verifies filed returns and cleared dues before issuing the certificate — this may involve review by the relevant tax officer at your office.

You can independently confirm a certificate's authenticity using the IRD's 'Tax Clearance Search' (कर चुक्ता खोजी) tool on ird.gov.np by entering the PAN, fiscal year and tax clearance number. Third parties such as procuring agencies and banks often use this to validate a certificate they have been given.

The paperwork required depends on your taxpayer type. Salaried individuals filing through the portal usually need little beyond their PAN and TDS record, while companies must have their audited financial statements and full return history in order. There is no fixed statutory fee for the certificate itself; the online single-employer route is generally free, and the real 'cost' is simply clearing any unpaid tax before you apply.

For a taxpayer with clean filings and no open issues, the certificate is commonly issued within a few working days, and the salaried online route can be near-instant. Cases involving an open assessment, an audit, a VAT/TDS mismatch or a large reconciliation gap take longer — potentially weeks — because the tax office must resolve the discrepancy before it will certify the account.

A tax clearance certificate is issued for a specific fiscal year, so it is best understood as period-specific rather than having a single fixed expiry date. For practical purposes many authorities treat it as current for a limited window and expect the certificate for the latest completed fiscal year; contractors and companies therefore typically renew each year once that year's returns are filed. Embassies and procuring agencies each set their own view of what counts as 'recent enough', so check the requirement of whoever is asking.

Rejections almost always trace back to a compliance gap rather than the application form. The most common causes are an unfiled return for any year, unpaid tax, interest or penalties, mismatches between VAT and TDS figures and the returns, and an open IRD assessment or audit. Companies are frequently held up by missing or incomplete audited accounts.

Because the fix for a rejection is usually to file the missing return or pay the outstanding amount and then reapply, the most reliable strategy is to keep filings current throughout the year rather than scrambling at bid or visa time. Where an assessment or dispute is open, resolving it with the tax office is a prerequisite to any certificate being issued.