How to Register Your Online Business with PAN in Nepal (Step-by-Step)

Selling online from Nepal has never been easier — but it comes with one non-negotiable step: getting your business properly registered with the Inland Revenue Department (IRD). Whether you're selling handcrafted goods, running a neighbourhood shop in Kathmandu, or launching your first online store, a valid PAN is your legal foundation. Skip it, and you risk fines, blocked payment accounts, or losing buyer trust when you can't issue a proper bill.

This guide covers PAN registration, VAT thresholds, and your ongoing IRD obligations — in plain language, specific to Nepal.

What Is PAN and Why Do Online Sellers Need It?

PAN stands for Permanent Account Number, issued by Nepal's Inland Revenue Department. It's a unique identifier tied to your business (or to you as a sole trader) for tax purposes — essentially your business's national ID for all financial transactions.

As an online seller, you need PAN because:

• Digital payment gateways — eSewa, Khalti, ConnectIPS — require a PAN-linked bank account for merchant settlement above certain thresholds.
• Courier and logistics partners often require a PAN when signing merchant agreements.
• Issuing a proper VAT or non-VAT bill is a legal requirement once you cross revenue thresholds.
• Without PAN, you cannot file taxes — and unfiled taxes accumulate penalties over time.

Who Must Register for PAN?

Under Nepali law, any individual or entity earning income from business activities must register for PAN. This includes:

• Sole traders and freelancers selling products or services
• Partnerships and private limited companies
• Online-only businesses with no physical storefront
• Home-based sellers generating regular income

There is no minimum income threshold for PAN registration. The myth that small sellers don't need one is exactly that — a myth. If you are running a business, you need a PAN from day one.

Documents Required

Gather these before visiting the IRD office or applying online:

For Sole Proprietorship

• Nepali citizenship certificate (both sides, clear photocopy)
• Passport-size photograph (recent)
• Ward office business registration certificate (Darta Pramanpatra) — or a letter from your local municipality confirming your business address
• Rent agreement or land ownership document for your business location

For Private Limited Company (Pvt. Ltd.)

• Company registration certificate from the Office of Company Registrar (OCR)
• Memorandum of Association (MOA) and Articles of Association (AOA)
• PAN cards of all directors and shareholders
• Citizenship copies of all directors
• Registered office address proof

Step-by-Step PAN Registration Process

Option A: Online via IRD's e-PAN System

1. Visit the IRD online portal and navigate to the Taxpayer Registration (PAN) section.
2. Fill in your details — business name, nature of business, address, and contact information.
3. Upload scanned documents — citizenship, photo, and address proof in the required format (PDF or JPG, typically under 500KB each).
4. Submit the application. You will receive an acknowledgment number immediately.
5. Visit your local IRD office within the specified window (typically 7 working days) with original documents for verification. Your PAN certificate is issued on the spot or within a few days.

Option B: Walk-In to Your Local IRD Office

1. Locate the nearest IRD office. Kathmandu Valley businesses typically register at the Large Taxpayer Office (LTO) or the Inland Revenue Office (IRO) in their district.
2. Collect Form 01 at the counter or download it from the IRD website beforehand.
3. Submit the completed form with all supporting documents at the registration counter.
4. Collect your PAN certificate. PAN registration is free — there is no fee.

The entire process typically takes one to three working days when your documents are complete and correct.

VAT Registration: When Do You Need It?

PAN and VAT are separate registrations. You must register for VAT with the IRD when your annual turnover crosses:

• NPR 50 lakh (NPR 50,00,000) for businesses selling goods
• NPR 20 lakh (NPR 20,00,000) for service-based businesses

Once you cross either threshold, you are legally required to:

• Register for VAT within 30 days of crossing the limit
• Charge 13% VAT on taxable goods and services
• Issue VAT bills to every customer
• File monthly VAT returns with the IRD

Many growing sellers hit the VAT threshold faster than expected — especially during Dashain and Tihar, when sales can spike three to five times normal volume. Don't wait until you are already over the limit; build basic revenue tracking into your accounting from the start.

One useful detail: some goods are VAT-exempt (basic food items, agricultural products, educational materials) and exports can be zero-rated. Check the IRD's VAT exemption list if your product category might qualify — it can meaningfully affect your pricing.

Your Ongoing Tax Obligations After Registration

Registering is the beginning, not the end. Here is what recurring compliance looks like:

• Annual income tax return — filed once a year. Sole proprietors are taxed as individuals; companies file as a separate entity.
• Advance tax — if your estimated annual tax liability exceeds NPR 7,500, you must pay in quarterly installments (Poush, Chaitra, Ashadh).
• TDS (Tax Deducted at Source) — if you pay salaries, rent, or certain contracted services, you must deduct TDS and deposit it with the IRD monthly.
• Monthly VAT returns — required once you are VAT-registered.

Missing any deadline carries a penalty of 5% of the tax due per month plus interest. Setting calendar reminders or hiring a local chartered accountant (CA) is almost always cheaper than the accumulated fines. A CA's annual retainer for a small business typically costs far less than a single month of VAT penalties.

Linking PAN to Your Digital Payment Accounts

Once you have your PAN certificate, you can open a business bank account and apply for merchant status with eSewa and Khalti. Both platforms require your PAN certificate, business registration documents, and a bank account in the business name. This unlocks direct digital payment acceptance and ensures your settlements are properly reconciled — something the IRD increasingly cross-checks as digital transactions become more traceable.

When you set up your store on Saauzi, you can connect your verified eSewa or Khalti merchant account directly to your storefront, so payments flow into your registered business account and every transaction is logged automatically — which makes filing your tax return significantly less painful than hunting through screenshots.

Common Mistakes to Avoid

• Using a personal PAN for business income: If you have an individual PAN from years ago and now run a business, you may need to update your taxpayer type or obtain a separate business registration with IRD. Mixing personal and business income under one PAN creates audit complications.
• Ignoring VAT until you are audited: The IRD cross-references bank deposit records and payment gateway data. If your eSewa or Khalti settlements consistently exceed VAT thresholds but you are not registered, expect a notice.
• Not keeping source documents: Nepal runs on a self-assessment tax system, meaning you are responsible for your records. Keep purchase bills, sales invoices, and bank statements for at least five years.
• Choosing the wrong business structure: A sole proprietorship is the fastest to register but offers no separation between personal and business liability. If you are building something with growth ambitions, consult a CA about Pvt. Ltd. registration from the start — it is harder to restructure later.

Actionable Takeaway

Before you launch — or within your first week if you are already selling — complete these three steps in order:

1. Register your business at your local ward office to obtain a Darta Pramanpatra.
2. Apply for PAN at your nearest IRD office or through the IRD online portal — it is free and takes one to three working days.
3. Open a business bank account in your registered business name, then link it to your eSewa and Khalti merchant accounts.

Legal compliance isn't bureaucratic overhead — it's the infrastructure that lets you accept payments at scale, issue proper bills, build customer trust, and grow your business without the anxiety of an IRD notice arriving when you least expect it.