Nepal Crypto Tax Guide
Nepal treats cryptocurrency gains as capital gains, taxed at 5-10% depending on the holding period (under 1 year: 10%, over 1 year: 5%). The Inland Revenue Department (IRD) has issued guidance confirming that digital assets are taxable. Mining income is treated as business income taxable at CIT/IIT rates. DeFi income, staking rewards, and airdrops are also taxable. All amounts in NPR.
The tax treatment of cryptocurrency and digital assets in Nepal has evolved as the IRD issues clarifying guidance. While the Nepal Rastra Bank (NRB) has historically taken a cautious approach to crypto, the IRD has confirmed that gains from crypto transactions are taxable as either capital gains (for investment) or business income (for trading). For related guidance, see our Capital Gains Guide →, Tax Filing Guide →, and Investment Income Guide →.
Crypto as Capital Gains
- Holding period treatment: Cryptocurrency held as an investment is treated as a capital asset. Gains are taxed at 10% if held for less than 1 year and 5% if held for more than 1 year — the same rates that apply to shares and property.
- Cost basis: The cost of acquisition is the purchase price in NPR (converted at the exchange rate on the date of purchase). If acquired through mining or staking, the fair market value on the date of receipt is the cost basis.
- Disposal events: Taxable events include selling crypto for fiat (NPR, USD), trading one crypto for another (crypto-to-crypto), using crypto to purchase goods or services, and gifting crypto (except to close relatives).
- Losses: Capital losses on crypto can be set off against capital gains from other sources (shares, property) in the same year. Unused losses can be carried forward for up to 7 years.
Crypto as Business Income
- Frequent trading: Individuals who trade cryptocurrency frequently (day trading, high-frequency trading) may be treated as carrying on a business — gains are taxed as business income at normal IIT rates (1-36%) rather than capital gains rates.
- Mining income: Income from crypto mining (including proof-of-stake validation) is treated as business income and taxed at the applicable IIT or CIT rate. Miners can deduct electricity costs, hardware depreciation, and other business expenses.
- DeFi and staking: Interest and rewards from decentralised finance (DeFi) protocols, staking, and liquidity provision are taxable as income at IIT rates. The fair market value of rewards at receipt is the taxable amount.
IRD Guidance and Compliance
- IRD position: The IRD has confirmed that digital assets are subject to taxation under the Income Tax Act. Taxpayers are required to declare crypto gains and income in their annual tax return.
- Reporting: Crypto gains are reported in the annual tax return (individual or corporate). There is no separate crypto tax form — gains are reported under capital gains or business income sections.
- Record keeping: Taxpayers must maintain records of all crypto transactions: date, type, amount, value in NPR, transaction hash, wallet addresses, and counterparty details. Records should be retained for at least 7 years.
- NRB considerations: While the NRB does not recognise crypto as legal tender, the IRD's tax guidance is separate from regulatory status. Taxpayers should ensure compliance with both tax and foreign exchange regulations.
For capital gains rates and exemptions, see our Capital Gains Guide →. For cross-border crypto transactions and DTT implications, see our Cross-Border Guide →.