PAN Registration in Nepal

What is PAN registration in Nepal?

PAN registration in Nepal refers to the process of obtaining a Permanent Account Number (PAN) from the Inland Revenue Department (IRD) of Nepal. This unique alphanumeric identifier is crucial for individuals and entities engaging in financial transactions within the country.

PAN serves as a means of tax identification and facilitates various financial activities such as opening bank accounts, conducting business transactions, and filing taxes.

It is a mandatory requirement for both residents and non-residents involved in taxable activities within Nepal.

Why is PAN registration necessary?

PAN registration is necessary in Nepal for several reasons.

Firstly, it is a legal requirement mandated by the government for individuals and entities engaging in financial transactions and taxable activities.

Secondly, PAN facilitates the identification and tracking of financial transactions, promoting transparency and accountability in the financial system.

PAN enables the government to effectively collect taxes and enforce tax laws by ensuring that all taxable entities are properly identified and accounted for.

VAT Registration in Nepal

How to apply for PAN registration?

  1. Online or Offline: You can apply online through the Inland Revenue Department’s (IRD) website (https://ird.gov.np/taxpayer-portal) or visit your nearest IRD office in person.
  2. Complete the Application Form: Fill out the online e-form or the downloadable application form (depending on your chosen method) with accurate information, including citizenship details, contact information, and choosing the appropriate applicant type (individual, company, etc.).
  3. Gather Required Documents: Prepare the necessary documents, which might include citizenship certificate (or passport for foreigners), recent passport-sized photos, and any additional documents specified for your applicant type (e.g., company registration documents for businesses).
  4. Submit Application: Submit the completed application form and required documents online or physically at the IRD office. One might receive a temporary registration number upon submission.
  5. Collect PAN Card: Within a specified timeframe, you’ll be notified to collect your permanent PAN card from the IRD office.

What are the documents required for PAN registration?

The documents required for PAN registration in Nepal depend on whether one is a citizen or a foreigner.

Nepalese Citizens:

    • Copy of Citizenship Certificate: This is the primary document proving your identity and citizenship status.
    • Two Passport-Sized Photos: Recent photos are required for identification purposes.

Foreigners:

    • Authentic Identification Document: This could be your passport, alien registration certificate, or any other government-issued ID recognized by Nepal.
    • Additional Documents (Possible): Depending on your situation, you might need proof of business registration or a recommendation letter from a local chamber of commerce (consult the Inland Revenue Department for specifics).

Can individuals and businesses apply for PAN?

Yes, both individuals and businesses can apply for PAN registration in Nepal. Individuals, including citizens and non-citizens residing in Nepal, as well as businesses such as companies, partnerships, and sole proprietorships, are eligible to obtain a Permanent Account Number (PAN). PAN serves as a crucial identifier for tax purposes and is necessary for engaging in various financial and taxable transactions within the country.

PAN Registration in Nepal

How long does PAN registration take?

The duration for PAN registration in Nepal can vary depending on various factors such as the volume of applications received, completeness of submitted documents, and efficiency of the processing system. Typically, the PAN registration process may take anywhere from a few hours to a few days to complete. Upon submission of the PAN application form and required documents, applicants may undergo verification procedures by the tax authorities before being issued a PAN card with a unique PAN number.

Can I apply for PAN online?

Yes, individuals and businesses can apply for PAN registration online in Nepal. The Inland Revenue Department (IRD) of Nepal has introduced online application facilities to streamline the PAN registration process and enhance convenience for applicants. Through the official website of the IRD or designated online portals, applicants can access the PAN application form, fill in the required details, and upload scanned copies of necessary documents. Online submission expedites the application process and allows applicants to track the status of their application electronically.

What is the PAN registration fee?

The PAN registration fee in Nepal may vary depending on the type of applicant and the services offered by the registration authority. Generally, individuals and businesses are required to pay a nominal fee to obtain a Permanent Account Number (PAN). The fee structure may be specified by the Inland Revenue Department (IRD) or other designated authorities responsible for PAN registration. Applicants should check the latest fee schedule provided by the relevant authorities to ascertain the applicable registration fee. any associated charges for processing or ancillary services may also be applicable, and applicants are advised to inquire about all applicable fees and charges before initiating the PAN registration process.

Are there any exemptions from PAN registration?

In Nepal, certain individuals or entities may be exempted from PAN registration under specific circumstances. For example, individuals below a certain income threshold or engaged in exempted categories of income may not be required to obtain a Permanent Account Number (PAN). Similarly, certain types of transactions or entities may be exempted from PAN requirements based on the nature of their activities or regulatory provisions. exemptions are typically granted within the framework of tax laws and regulations, and eligibility for exemption is subject to verification and approval by the tax authorities.

How to update PAN registration information?

To update PAN registration information in Nepal, individuals or entities must submit a request for changes or corrections to the relevant tax office or designated PAN registration authority. Depending on the nature of the update, such as change of address, name, or other personal details, applicants may be required to submit supporting documents along with the request for updating PAN information. These documents may include updated citizenship certificates, incorporation documents, or other relevant proofs as applicable. The PAN registration authority will update the information in their records and issue a revised PAN card.  

What are the benefits of having a PAN card?

Here’s a breakdown of the benefits of having a PAN card in Nepal:

  • Simplified Tax Filing: A PAN card acts as your unique tax identification number, streamlining the process of filing income tax returns for both individuals and businesses.
  • Transparency and Efficiency: PAN registration promotes transparency in the Nepalese tax system. It allows the government to efficiently track income sources and tax payments.
  • Essential for Transactions: Many financial transactions in Nepal require a PAN card, including opening bank accounts, applying for loans, or buying and selling certain properties. Having a PAN eliminates hurdles in these financial activities.
  • Government Benefits: Some government benefits and subsidies might require a PAN card for verification and eligibility purposes.
  • Business Advantages: Businesses with a PAN card can benefit from easier access to credit facilities, participating in government tenders, and establishing a more professional image for their operations.
  • Reduced Risk of Penalties: Failing to register for a PAN when it’s mandatory can lead to penalties. Having a PAN ensures you’re compliant with tax regulations.
  • Investment Opportunities: A PAN card might be necessary for certain investment opportunities like purchasing stocks or bonds.

Can I apply for multiple PAN cards?

No, individuals or entities are not allowed to apply for multiple PAN cards in Nepal. The issuance of multiple PAN cards to the same entity or individual is strictly prohibited under the tax laws and regulations of the country. Each taxpayer is assigned a unique Permanent Account Number (PAN) that serves as their exclusive identifier for tax purposes. Attempting to obtain multiple PAN cards can lead to legal consequences and may result in penalties or sanctions imposed by the tax authorities. Therefore, individuals and entities should ensure that they possess only one valid PAN card and comply with the prescribed procedures for updating or correcting PAN information if necessary.

How does PAN registration affect tax compliance?

PAN registration significantly impacts tax compliance in Nepal in several ways:

  • Unique Identification: A PAN serves as your unique tax identification number, streamlining tax filing and record-keeping. It links your tax returns and financial transactions to a single source, simplifying communication with the Inland Revenue Department (IRD).
  • Transparency and Visibility: PAN registration enhances transparency by providing the IRD with a clearer picture of your financial activities. This discourages tax evasion, as all transactions linked to your PAN are traceable.
  • Efficient Tax Administration: PAN allows the IRD to efficiently manage taxpayer data and track tax payments. This facilitates quicker processing of tax returns and reduces administrative burdens for both taxpayers and the government.
  • Reduced Tax Deduction at Source (TDS): PAN holders often benefit from lower TDS rates on various transactions compared to non-PAN holders. This translates to less tax withheld at the source, such as on interest earned or salary income.
  • Access to Financial Services: Many financial institutions in Nepal require a PAN for opening bank accounts, making investments, or receiving high-value payments. PAN registration becomes a prerequisite for accessing these essential financial services.
  • Government Benefits: Some government services or benefits might require PAN registration for identification and verification purposes.

What are the consequences of not having a PAN card?

Not having a PAN card in Nepal can entail various consequences for individuals and entities. Firstly, without a PAN card, taxpayers may encounter difficulties in conducting financial transactions such as opening bank accounts, investing in securities, or engaging in business activities that require PAN identification. Moreover, not having a PAN card can impede tax compliance efforts, as PAN is mandatory for filing income tax returns and fulfilling other tax obligations. individuals or entities without a PAN card may face challenges in accessing certain government services, participating in tenders or contracts, or availing tax benefits and exemptions.

Can foreigners apply for PAN in Nepal?

Yes, foreigners can apply for PAN registration in Nepal if they are engaged in taxable activities within the country. Whether residing temporarily or permanently in Nepal, foreigners involved in financial transactions such as employment, business, investment, or any other taxable activity are eligible to obtain a Permanent Account Number (PAN). Foreigners seeking PAN registration must submit the requisite application form along with supporting documents to the designated tax office or PAN registration authority. The documents required for PAN registration by foreigners may include a valid passport, visa, and other relevant identification and residency documents as specified by the tax authorities.

How to check the status of PAN registration?

There are two ways to check the status of your PAN registration in Nepal:

  1. Online Search:
    • The Inland Revenue Department (IRD) website offers a PAN search function: https://ird.gov.np/pan-search.
    • On this page, enter your citizenship number (for individuals) or company registration number (for businesses) in the designated field.
    • Click “Search” and the website will display the status of your PAN application, indicating whether it’s “Pending,” “Approved,” or “Rejected” (if applicable).
  2. Contacting the IRD:
    • If the online search doesn’t provide the desired information or you encounter any issues, you can directly contact the Inland Revenue Department.
    • Here are some contact options:
      • IRD Call Center: Dial 01-5970176 (during office hours)
      • IRD Email: serviceird@ird.gov.np
    • When contacting the IRD, provide your citizenship number or company registration number along with your inquiry about the PAN application status.

Can I surrender my PAN card?

Yes, individuals or entities can surrender their PAN card in Nepal under certain circumstances. If a taxpayer no longer requires a PAN card due to reasons such as cessation of business activities, relocation abroad, or other valid reasons, they may choose to surrender their PAN card to the tax authorities. To surrender a PAN card, taxpayers must submit a formal request for surrender along with the PAN card to the designated tax office or PAN registration authority. Upon verification of the request, the tax authorities will cancel the PAN card and update their records accordingly.

What are the penalties for misuse of PAN?

Misusing your PAN card in Nepal can lead to penalties and even prosecution depending on the severity of the offense

  • Tax Evasion: Using your PAN card to conceal income or evade taxes can result in significant fines and potential imprisonment. The Inland Revenue Department (IRD) takes tax evasion seriously and has the authority to investigate and prosecute offenders.
  • Fake PAN Creation or Use: Creating or using a fake PAN card is a serious offense. Penalties can include hefty fines and even jail time depending on the intent and purpose of the misuse.
  • Providing False Information: Submitting false information during the PAN registration process can also lead to penalties. The IRD emphasizes accurate data to ensure the integrity of the tax system.
  • Aiding Tax Evasion: If you knowingly assist someone else in using your PAN card for tax evasion purposes, you could also face legal consequences.

Can I apply for PAN on behalf of someone else?

Yes, individuals or entities can apply for PAN on behalf of someone else in Nepal under certain circumstances. For example, a legal guardian may apply for PAN on behalf of a minor, or an authorized representative may apply for PAN on behalf of an incapacitated individual or a corporate entity. To apply for PAN on behalf of someone else, the applicant must submit a duly filled PAN application form along with the required documents and authorization letter or power of attorney authorizing them to act on behalf of the concerned individual or entity.

PAN Registration in Nepal

What is PAN in Nepal?

PAN (Permanent Account Number) is a unique identification number for taxpayers in Nepal.

Who needs to register for PAN in Nepal?

All businesses, companies, and individuals engaged in taxable activities must register for PAN.

Where can I register for PAN in Nepal?

PAN registration is done at the Inland Revenue Department or its local offices.

Is PAN registration mandatory for all businesses?

Yes, PAN registration is mandatory for all businesses operating in Nepal.

What documents are required for PAN registration?

Required documents include company registration certificate, citizenship certificate, and passport-sized photos.

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