VAT on Air Travelling

 

Introduction of VAT on Airlines Services (Air Travelling)

 

Finance Act, 2080 introduces VAT on Air Travel by removing it from the list of VAT exempted items as in Schedule 1 of the VAT Act.

 

 

( Notice by IRD published on 2080/03/11)

Application for Registration shall be given by filling an online form

 

An application for registration under VAT shall be given (online form).
Foreign company (Airlines) shall submit an operating license issued by respective authority.

 

Credit of Input VAT on Purchases

 

If there is any Stock/ Inventory item on which VAT had been paid credit can be claimed by filling up a form Annexure - 16, for any item which was purchased within previous 12 months of date of registration.
Such form shall be filled within 15 days of registration into VAT.

 

VAT Invoice to be issued

1. Amount Charged by Airlines Service Company	XX
2. Add: Add: Profit Margin (commission)	XX
Total	100
3. Add: Value Added Tax (VAT)	13
Total	113

Internal Travelling (within Nepal)

 

 All internal airlines' services collect VAT on ticket price.

 

New Income Tax Slab Rate for Salaried or Business Individual Person in Nepal For F.Y. 2080-081

Selection of Single (for Unmarried Individual) or Coupled (for Married Individual) is very important factor for determining Income Tax Slab in Nepal.

Income Tax Rates for Individual are as follows:

 

 But if you are married and you wish to claim for coupled return (if both husband and wife are working, you cannot opt for this option), the following would be the tax implications:

There are some tax savings facilities that an Individual person can obtain. We will discuss them one by one.

1. Contribution into a retirement funds.

 Contribution into Citizen Investment Trust (CIT) or PF (max. 3 Lakh Combined)

 Contribution into Citizen Investment Trust (CIT) or PF or SSF (max. 5 Lakh Combined or SSF only)

For above both conditions, Max. ceiling is 1/3 of Assessable Income

2. Remote Area Allowances 

(10k to 50k, according to remote area category)

3. Amount paid into Life Insurance Premium 

(Max. upto Nrs. 40,000)

4. Amount paid into Medical Insurance Premium 

(Max. upto Nrs. 20,000)

5. Amount paid for Insurance Premium of self owned house

(Max. upto Nrs. 5,000)

Notes: 

a. 10% Rebate will be allowed on computed tax to Female Individual, if she has income only from salary.

b. Nrs. 750 can be claimed as Income Tax Credit (on computed tax amount) for Medical Expenses upto presetation of Medical Bills.