Advance Collection of Tax Flashcards
What are the cases where an asset is deemed to be disposed of?
An asset is deemed to be disposed of in the following cases:
- immediately before their death, all assets and liabilities of an individual transfer.
-When income is greater than outgoings.
-When a debt claim becomes a bad debt.
-When there is a change in the use of an asset that alters its type.
-When Section 57 is attracted (i.e. a 50% ownership change in any entity within 3 years).
-When a resident person becomes a non-resident (except for land and buildings in Nepal).
How are depreciable assets taxed upon disposal?
Through balancing charge or terminal depreciation.
What is the advance tax on the disposal of shares under Sec. 95A(2) for resident individuals selling listed shares??
Ownership > 365 days: 5% of gain
Ownership <= 365 days: 7.5% of gain
What is the advance tax rate for resident entities selling shares?
Listed shares: 10% of gain
Unlisted shares: 15% of gain
What is the advance tax rate for non-residents selling shares?
Both listed and unlisted shares: 25% of gain
Who collects the advance tax on share disposal?
Listed shares: Collected by the broker.
Unlisted shares: Collected by the company before registering the transfer.
What are the advance tax rates for land/building disposal classified as NBCA by an individual?
Ownership ≥ 5 years: 5% on total gain
Ownership < 5 years: 7.5% on total gain
Year end tax rate for gain from NBCA
Taxed at 5% or 7.5%
No tax up to unexhausted exemption limit
Year end tax rate for gain from disposal of assets for cases other than individual?
Added in income and taxed at normal rate.
However, depreciable assets are taxed through balancing charge or terminal depreciation
Advance tax rate on disposal of assets by propreitorship and entity
1.5% of disposal value
How is the cost of shares determined for tax calculation?
Listed Co.: Weighted average cost
Unlisted Co.: Actual cost
What is the advance tax on gains from commodity future market under Sec. 95A(1)?
10% of gain amount
What is the advance tax on Language exam fees (IELTS, PTE, GRE)
Standardized assessment fees (SAT)
Collected by Resident Bank / F.I.
Rate: 15%
What advance tax applies to individuals (non-proprietorship) for Software/electronic services provided outside Nepal?
5%
Advance tax rate on Consultancy services outside Nepal
Uploading audio-video content in social media?
5% for individuals (non-proprietorship)
How is advance tax applied to e-commerce operators?
1% on payment for goods/services sold via platform
What is the advance tax on import of certain goods under Sec. 95A(7)?
10% or 2.5% of custom valuation on commercial goods
VAT-attractive goods: 1.5%
