Short answer
If you're a resident individual not running a registered business and you're paid in foreign currency for software, electronic services or consultancy provided outside Nepal, or for content uploaded to social media, the tax deducted when the money comes in through a bank is final. You don't add that income to a return. The rate is reported as 5%. To use this, bring payments in through a Nepali bank or licensed channel and keep a PAN. Income from clients in Nepal is taxed under the normal slabs.
The details
What counts
| Income | How it's taxed |
|---|---|
| Foreign client pays you for software, IT or online services | Final withholding when it arrives through a bank |
| Foreign client pays you for consultancy | Final withholding when it arrives through a bank |
| YouTube, Facebook or other social media payouts | Final withholding when it arrives through a bank |
| Clients in Nepal | Normal income tax slabs |
| Income through your registered business | Business income tax |
Common problems
Do I need a PAN?
Yes. Banks and payment providers ask for one, and it links the tax deducted to you. See the PAN page.
What if I bring money in through hundi or a friend abroad?
Then there's no record of your income and no tax credit. Hundi is illegal, and unexplained money can cause problems with banks later.
I have a registered company or sole proprietorship.
Then the business is taxed as a business, not under the final withholding rule for individuals. Talk to a tax adviser about the IT export incentives for businesses.
I also have a salary in Nepal.
Your salary is taxed separately under the normal slabs. The final withholding only covers the qualifying foreign-currency income.
Real experiences
Been through this recently? Tell the next person which office you went to and what they asked for. Reports are published as community notes, apart from the official information.
Share your experienceSources
- Inland Revenue Department: Economic Act 2083 information bookletird.gov.np
- Kumari Job: foreign freelance income tax in Nepal 2026kumarijob.com
Written from the sources above and last checked on 8 Oct 2026. Some details aren't confirmed against an official page yet, so check fees and documents with the office before you go.
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