Nepal’s Government adopted VAT amendments, through which it introduced a mandatory VAT framework for ride-sharing digital platforms that facilitates the provision of transport and delivery services. On July 17, 2026, the Inland Revenue Department issued a public notice in this regard.
VAT on Ride-Sharing Digital Platforms
Ride-sharing platform operators are mandated to collect VAT at 5% from service providers(drivers) offering transport and delivery services to customers through the platform’s app.
To assist responsible taxable persons with new collection and reporting duties, the Inland Revenue Authority issued technical guidance.
Under new rules, ride-sharing platforms should collect tax on behalf of the registered drivers, along with mandated ID information details of each driver, and submit the declaration to the tax authority by the 25th day of the month following the reporting period.
The platform operator is required to remit the collected tax on behalf of the drivers registered on the platform. Alongside the tax collection and reporting duty, the platform operator should also issue tax invoices on behalf of drivers.
The collected and remitted tax on behalf of the drivers isn’t part of the platform’s revenue. No deduction right on this collection.
The platform operator shall continue to collect VAT at 13% on commissions and other booking fees charged to drivers.
Requirements for Service Providers
Service providers(in this case, drivers) are obligated to register on the platform and obtain a Permanent Account Number(PAN)which serves as the driver’s ID on the platform(relevant for later declarations and revenue tracking).
Drivers that exclusively provide their services via the platform aren’t mandated to register for VAT for these services if the platform operator is compliant.