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5 Types of Tax Returns Every Accountant Must Learn to File

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Taxation Skills are one of the most required skills for accountants. Mainly because accounting and taxation go side by side and deeply interlinked with each other in corporate world that one can not be separated from the other. Hence, as an accountant you need to understand how taxation system works, it’s computation, compliance and return filing skills in order to grow excel and grow in your career.

In this blog we have mentioned 5 such tax return filing techniques needed for an accountant to carry out managerial functions properly. Let’s start with the most common, VAT Return Filing: 

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1. VAT Return Filing

In Nepal, every VAT Registered Businesses must file a VAT Return either monthly or every four months, depending on their transaction in last fiscal year. Businesses having transaction more than Rs. 1 Crore is needed to file monthly VAT Return within 25th of the next month. VAT Return is essential for tax compliance as it helps tax officials see how much tax you’ve taken in from sales and how much you’ve paid on what you bought for the business.

Process to Filing VAT Return

Step 1. Visit http://ird.gov.np

Step 2. Select Taxpayer Login

Step 3. Select “VAT” option.

Step 4. Select “VAT Return Entry”

Step 5.Fill Login Information

Step 6.Fill Details in VAT Return Form

Step 7.Submit and Verify

Step 8.Print the verified VAT Return

2. ETDS Filing

Every business in Nepal, including NGOs, is required to deduct, deposit and file an Tax Deducted at Source report commonly known as ETDS Filing. This submission should be made by the 25th of the succeeding month on which the invoice for the given transaction is raised. To file an ETDS return you require a comprehensive list of transactions where Tax Deducted at Source (TDS) is applicable, ensuring accurate reporting and compliance with tax laws.

Process of ETDS Filing

Step 1. Visit http://ird.gov.np

Step 2. Select Taxpayer Login

Step 3. Select “E-TDS” option

Step 4. Fill Login Information

Step 5. Select ” ट्रान्साक्सन भर्ने ” option

Step 6. Fill Details in E-TDS Return Form

Step 7. Enter TDS payment details on ” भौचर भर्ने ” option

Step 8. Save, Submit and Verify

Step 9. Print the verified E-TDS Return

3. Income Tax Returns (D1, D2, D3)

In Nepal, every business entity, including firms and companies, is required to file an Income Tax Return commonly known as D1, D2 or D3 Filing. Every proprietorship firm with less than Rs. 30 Lakhs of transaction and Rs. 3 Lakhs profit is needed to file D1 Return where as those with turnover more than Rs. 30 Lakhs and less than Rs. 1 Crore is needed to file D2 Return subject to compliance with several factors. All Private Companies as well as Private Firms having turnover more than Rs. 1 Crore is required to file D3 Return.
 
This filing is typically due by the end of Asoj (mid-October) in the Nepali calendar, although extension of 2/3 months can be granted under application with proper reasoning. Please note that the submission of D3 Return must include the business’s audited financial statements as well.

Process to file D1, D2, D3 Income Tax Returns

Step 1. Login http://ird.gov.np

Step 2. Click Taxpayer Portal and Choose D1, D2 or D3 depending upon factors discussed above

Step 3. Fill the required information like username and password

Step 4. Get the submission number

Step 5. Enter the financial information like sales, purchase and many other details as required

Step 6. Review and reconcile with Financial Statements 

Step 7. Submit the Document

*Please note that it is highly recommended to get assistance from your external auditor while filing the Income Tax Return.

4. Estimated Tax Return

In Nepal, every businesses with annual tax liability exceeding Rs. 7,500 are required to file an Estimated Tax Return in which the estimated sales, profit etc. of a business for the whole financial year is needed to be filed. This filing must be completed by the end of Poush (mid-January).
 
Please note that along with Estimated Tax Return the businesses categorized as D3 Return Filers must pay 40% of their estimated annual income tax, whereas D2 Return Filers are obliged to pay 50% of their estimated annual income tax. This advance tax payment system is designed to facilitate smoother tax collection and help businesses manage their tax liabilities more effectively throughout the fiscal year.

Process to file Estimated Tax Return

Step 1. Login http://ird.gov.np

Step 2. Choose Taxpayer Portal.

Step 3. Choose Estimated Return Entry.

Step 4. Fill Required Company Information.

Step 5. Enter details regarding estimated profit calculation for the year.

Step 6. Save, Submit and Verify Estimated Return

5. File Tax Extension

If for any reason you are unable to file your Income Tax Return within Ashoj 30th, you can file an extension with IRD with adequate reasons. If your business falls under Large or Medium Tax Office, you can file an extension of 3 months, i.e. up to Poush end, and for other businesses, you can file an extension for 2 months, i.e. up to Mangsir end in the first phase and for further 1 month upto Poush end if you have valid reasons in the second phase. 

Process to File Tax Extension:​

Step 1. Visit https://ird.gov.np/

Step 2. Go to General > Taxpayer Login

Step 3. Enter your PAN & Password

Step 4. Click on “Request For Filing Date Extension”

Step 5. Enter Finance Year as 2079-80, Extension Date and Reason

Step 6. Click “Save” or “Submit”

Conclusion

In short, for accountants in Nepal, knowing about different taxes like VAT, ETDS, Income Tax, and Estimated Tax is important. The website ird.gov.np helps a lot with this. It’s key to make sure that taxes are filed on time and done right. Usually Tax Return Due Dates are not extended commonly in Nepal. So, it’s always better to do things early. Good handling of these taxes is important for accountants to help their businesses.

How to Learn Advanced Accounting & Taxation Skills from Khata Business Academy:

Khata Business Academy offers three interactive online courses that can help you learn and prepare Tax Returns, Financial Reports including Balance Sheet, Profit & Loss, Cash Flow and Financial Projections:

Business Taxation Course

You can learn Income Tax Computation and VAT & TDS Return Filing process along with in-depth concepts and case studies. You can also practice with live templates and calculate Fines as well as Penalties. Recommended for Fresher to Experienced Accountants.

You can access the course through this link: https://khataacademy.com/np/courses/business-taxation-course/

Financial Reporting Course

This course covers the basics of financial statement preparations. You will learn how to prepare Transactional Reports, Taxation Reports, Financial Reports, and Projection Reports. Recommended for accountants with 1-3 years of experience.

You can access the course through this link: https://khataacademy.com/np/courses/financial-reporting-course/

NFRS Based Accounting

This course covers the concepts, implementation, and reporting framework under Nepal Financial Reporting Standard (NFRS) based on IFRS. NFRS is being implemented in Nepal from FY 2080-81 onwards. Recommended for Account Managers.

You can access the course through this link: https://khataacademy.com/np/courses/nfrs-for-accountants/

All of these courses are taught by experienced Chartered Accountants and are designed to help you gain the skills and knowledge you need to succeed in a career in accounting. Come, join the KBA Family of Accountants.

Do You Want To Boost Your Accounting Skills?

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