The government has continued the 5% tax on income earned by content creators through social media platforms such as YouTube, TikTok, Instagram and Facebook for the current fiscal year.

The Inland Revenue Department (IRD), while publishing the income tax structure for FY 2083/84, said individuals receiving foreign-currency payments for software or electronic services provided outside Nepal, as well as those earning from uploading audiovisual content on social media, are subject to a 5% tax on the amount received.

The tax has been applied to creators since last year and is generally collected as tax deducted at source (TDS) when banks transfer their earnings into local accounts. Income from YouTube AdSense, TikTok creator programs, Instagram bonuses and Facebook in-stream advertising is covered, along with brand deals, sponsored content, paid promotions, product reviews and affiliate commissions. Paid online courses, downloadable digital products and online sales also fall under the category.

For businesses, the IRD has maintained a 25% corporate income tax rate for general businesses on net taxable income. Banks, financial institutions, general insurance companies, and tobacco and petroleum manufacturers face a higher 30% rate.

The government has also set different annual tax obligations for small businesses. A business with annual transactions of up to Rs 3 million and annual income of up to Rs 300,000 is required to pay Rs 7,500 in metropolitan and sub-metropolitan areas, Rs 4,000 in municipalities and Rs 2,500 in other areas. Businesses with annual turnover between Rs 3 million and Rs 10 million pay 1% tax on goods transactions and 2% on service transactions.

The tax structure also includes 7.5% capital gains tax on real estate held for more than five years and 10% for properties held for less than five years. For shares traded on the stock exchange, the rates are 7.5% for holdings exceeding 365 days and 10% for holdings of 365 days or less.

For salaried workers, income up to Rs 1 million is taxed at 1%, followed by rates of 10%, 20%, 27% and 29% across progressively higher income brackets. Certain sole proprietors, pensioners and contributors to the contribution-based social security fund are exempt from the 1% tax on the first Rs 1 million slab.