PAN Registration, Conversion and Changes in Nepal

Personal PAN is commonly required for individuals such as:

• employees;

• professionals;

• persons receiving taxable payments;

• persons required by IRD rules to obtain PAN.

IRD provides an online Personal PAN registration process through the Taxpayer Portal. The official SOP requires the applicant to start from IRD's registration menu and submit the prescribed information for verification.

A person carrying on a business generally requires Business PAN according to the applicable registration framework.

For Business PAN, IRD confirms that the relevant business registration certificate must also be submitted.

Examples may include:

• proprietorship;

• company;

• partnership;

• joint venture;

• institution;

• NGO/NPO;

• cooperative.

IRD publishes separate Business PAN registration/amendment forms for different legal forms.

If an individual already has Personal PAN and subsequently registers a business, a second arbitrary taxpayer identity should not simply be created.

IRD states that after business registration, the taxpayer may apply with the business-registration certificate to have their Personal PAN converted into Business PAN through the relevant IRD/Taxpayer Service Office.

Practical sequence

Personal PAN exists → Register proprietorship/business → Obtain business-registration certificate → Apply to IRD → Convert/update taxpayer registration → Use Business PAN for business compliance.

After incorporation/registration, an entity should complete its tax registration using the applicable entity registration process.

IRD maintains an official Business PAN registration process for entities and a corresponding company/entity registration and amendment form.

Typical information can include:

• incorporation certificate;

• entity name;

• registration number;

• address;

• directors/responsible persons;

• business activities;

• contact information;

• supporting registration documents.

PAN registration and VAT registration are related but different.

A taxpayer may initially be: PAN registered

and subsequently become: PAN + VAT registered where VAT registration becomes mandatory or voluntary registration is approved.

IRD maintains a specific procedure for upgrading an entity/proprietorship from PAN to VAT.

Therefore:

PAN registration ≠ VAT registration

and

having PAN does not mean the taxpayer may issue VAT invoices.

IRD states that a person whom the Department requires to obtain PAN for earning assessable income or for withholding tax must obtain PAN before earning such income or carrying out the withholding obligation.

PAN can also be obtained voluntarily by persons who are not otherwise required to register.

A common misconception is:

“PAN must be renewed annually.”

IRD's answer is clear: PAN is permanent and does not require annual renewal.

However, annual/periodic:

• tax returns;

• VAT returns;

• TDS filings;

• other compliance

may still be required.

Do not confuse taxpayer-registration renewal with tax-return filing.

Examples requiring registration amendment can include:

• registered address;

• branch/business location;

• business nature;

• contact details;

• responsible person;

• other taxpayer master information.

The general IRD guidance requires specified changes such as address/business place/nature changes to be notified within: 15 days

of the change.

IRD states that a non-resident may apply for PAN:

• personally;

• through the person's Nepal Permanent Establishment; or

• through a Nepal representative.

A foreign taxpayer should separately consider:

• Permanent Establishment;

• VAT/DST;

• withholding;

• treaty;

• foreign-investment/NRB rules.

IRD's current taxpayer system supports functions extending beyond initial registration, including taxpayer transactions, filing-extension requests, amendment requests, payment vouchers and tax-clearance functions.

Use the official IRD Taxpayer Portal for the application or amendment, and retain the submitted information, verification and certificate.

• Identify taxpayer type

• Personal or business PAN?

• Obtain underlying business/entity registration

• Prepare citizenship/identity documentation

• Prepare registered-address evidence

• Prepare contact information

• Identify business activity

• Complete Taxpayer Portal application

• Submit/verify required documents

• Obtain PAN certificate

• Confirm taxpayer details are correct

• Determine whether VAT registration is also required

• retain digital/PDF PAN certificate

• Update changes within applicable period

Obtaining another PAN instead of properly converting/updating an existing Personal PAN

Assuming PAN allows VAT invoicing

Failing to update changed business address

Waiting for annual renewal even though PAN itself does not require renewal

Using a personal tax identity incorrectly for entity transactions

Leaving incorrect mobile/e-mail/address information in IRD records

PAN is the foundation of Nepal tax compliance. Taxpayer master information should be reviewed whenever the business changes address, legal structure, ownership/management information or tax-registration status.