VAT calculator
Nepal charges VAT at 13%. Adding it is the easy direction — this page is built around the other two: taking it back out of a price that already includes it, and getting a restaurant bill in the right order.
What are you working out
Rs 1,000.00before VAT · Rs 130.00 is the VAT in Rs 1,130
The split
| Before VAT | Rs 1,000.00 |
|---|---|
| VAT at 13% | Rs 130.00 |
| Service charge | — |
| Total | Rs 1,130.00 |
| Each person pays | — |
What the shortcut costs
| Taking 13% off instead | Rs 983.10 |
|---|---|
| Wrong by | Rs -16.90 |
| Correct divisor | ÷ 1.13 |
Registration, not just arithmetic. A business must register for VAT once turnover passes Rs 50,00,000 for goods, or Rs 30,00,000 where services are involved. Those two thresholds move with the Finance Act — Thresholds change with the Finance Act. Confirm against the IRD before you rely on being under one.
Some supplies are exempt and some are zero-rated, and they are not the same thing: an export is zero-rated and still lets the exporter reclaim input VAT, while an exempt supply does not. This page assumes an ordinary taxable supply at the standard rate.
Why subtracting 13% gives the wrong answer
A bill of Rs 1,130 includes Rs 130 of VAT, leaving Rs 1,000. Take 13% off Rs 1,130 instead and you get Rs 983.10 — short by Rs 16.90, because the 13% was charged on the smaller number and you just took it off the larger one.
The correct move is to divide by 1.13. The error from subtracting instead is always the same proportion — about 1.5% of the base — so it scales with the invoice. On a Rs 10,00,000 contract it is Rs 14,956 of base recorded as tax.
The restaurant bill, in the order it is actually built
Service charge goes on the food. VAT goes on the foodand the service charge, because a service charge is the restaurant's own charge and is taxable like anything else it sells. The two do not add up the way people expect:
- FoodRs 1,000
- Service at 10%Rs 100
- VAT at 13% on Rs 1,100Rs 143
- TotalRs 1,243
That is 24.3% on top of the food, not the 23% you get by adding the two rates together. The gap is the VAT charged on the service charge, and on a Rs 1,000 dinner it is Rs 13. It is small per meal and it is the reason the arithmetic on the printed bill never quite matches the arithmetic in your head.
Reversing the order — VAT first, then service on the VAT-inclusive figure — gives a different and larger total, and is wrong. If a bill shows service charged on top of a VAT-inclusive subtotal, that is worth querying.
Who keeps the service charge
Not the tax office, and not, in principle, the owner. The Labour Act treats a pooled service charge as belonging to the staff, distributed under rules the establishment sets. It is not a tip and it is not optional once it is on the menu — but it is also not a government charge, which is why it can be questioned in a way the 13% cannot.
Working out the tax on your own income instead?
The salary tax calculator covers income tax band by band, the TDS calculator handles what a payer deducts before paying you, and the electricity bill calculator deals with the one bill where VAT is 5% rather than 13%.
Common questions
- Is this Nepal VAT calculator page free to use?
- Yes. Every Kaamko tool is free, with no sign-up, no account and no usage limit. They are published by Imperial College of Engineering, a Tribhuvan University-affiliated engineering college in Tathali, Bhaktapur, and are not funded by advertising.
- Does what I type get sent anywhere?
- No. This tool runs entirely in your browser: the calculation happens on your own device, nothing you type is uploaded, and nothing is stored after you close the page.
- Where do the figures come from?
- Each tool names its source on the page, along with the date that source was read. Where a rate or a slab is provisional — announced in a budget speech but not yet gazetted, for instance — the page says so rather than presenting it as settled.
- Who maintains these tools?
- Imperial College of Engineering, formerly Janakpur Engineering College, in Tathali, Bhaktapur, Nepal. Corrections are welcome by phone on 01-5091616 or through the contact page, and a figure reported as wrong is checked against its published source rather than adjusted on request.
Last checked by Imperial College of Engineering. Rates, slabs and formulas are re-checked against their published source on this date.