Foreign Tourism Fees implementation in Nepal

February 16, 2025

Nepal, a country blessed with stunning natural beauty and rich cultural heritage, has long been a favorite destination for travelers worldwide. To enhance the growth of tourism and contribute to national revenue, the Government of Nepal has introduced the Foreign Tourism Fee for 2081/2082. This new initiative aims to regulate and streamline the tourism industry, ensuring that foreign tourists contribute to the country’s development and sustainability. Foreign tourism significantly contributes to Nepal's economy by promoting international travel, cultural exchange, and business opportunities. The Government of Nepal has introduced specific guidelines for foreign tourism fees to regulate this sector and ensure proper revenue collection.

What is a Foreign Tourism Fee?

Foreign tourism refers to the act of purchasing a travel package for an international trip, either by an individual through a tour package seller or by a company sending its employees abroad for business purposes. These packages typically include services such as flights, accommodation, transportation, and entertainment. To manage revenue from such transactions, the Government of Nepal imposes a foreign tourism fee on Nepali tourists and companies involved in international travel arrangements.

Regulation of Foreign Tourism Fees in Nepal

The foreign tourism fee is regulated under the Finance Act, of 2081 introduced by the Government of Nepal. According to this bill, a 5% tourism fee is levied on the total cost of an international tour package purchased by Nepali tourists. This fee applies to all components of the travel package, including transportation, food, accommodation, and entertainment.

Additionally, companies that send their employees abroad for business-related purposes must also account for a 5% tourism fee when recording such expenses. This ensures that both individuals and corporate entities contribute to revenue collection related to foreign tourism.

Taxpayer Obligations

To maintain transparency, taxpayers must follow specific procedures:

Transactions related to foreign tourism should be recorded on an accrual basis.

Monthly transaction details must be submitted to the tax office by the 25th of the following month.

If no foreign travel expenses are incurred, submission is not required.

Delayed submissions may incur a 2.5% annual penalty fee.

Compliance and Penalties

The tax office regularly reviews transactions to ensure compliance. If a tour package seller or company underreports transactions or fails to collect the appropriate tourism fee, an additional 25% penalty may be imposed. In cases where third-party evidence suggests tax evasion, the tax office can issue an initial tax assessment, which is considered valid if delivered directly, sent via electronic communication, or published publicly.

Taxpayers have the right to appeal these assessments by providing supporting evidence within 15 days of receiving the notice. The tax office will then review the evidence and issue a final assessment.

Conclusion

Foreign tourism fees play a crucial role in Nepal's revenue system, ensuring that both individuals and businesses contribute fairly when engaging in international travel. Understanding these regulations helps promote compliance, support economic development, and maintain transparency within the tourism sector. 

Summarized by

Advocate Parbati G.T.

Legal Advisory and Expert Division

Rudolph Corporate Services Pvt. Ltd.

Disclaimer: Kindly seek the expert before taking any action based on the content here above.