As businesses in Nepal increasingly adopt digital systems for billing and accounting, ensuring compliance with the Inland Revenue Department (IRD) has become more important than ever. Whether you're using a traditional desktop application or a modern cloud-based billing system, your software must meet specific technical and legal standards to issue valid electronic invoices.

All the requirements outlined in this blog are based on the official eBilling Directive issued by the IRD of Nepal. This directive outlines the minimum standards that every eBilling software must meet to remain compliant. You can download the official eBilling Directive here for reference.

In this blog, we break down the official IRD guidelines and help you understand the key differences in compliance requirements for general (locally hosted) and cloud-based eBilling software.

What Is eBilling Compliance, and Why Does It Matter?

The IRD has established a detailed checklist to ensure that billing software used by businesses:

• Maintains data integrity
• Prevents fraudulent invoice generation
• Enables real-time monitorin, and
• Aligns with national tax laws

Failure to comply with these standards can result in non-recognition of invoices, penalties, or even blacklisting of your software.

What are the requirements for general (locally hosted) software?

If your software runs on a local machine or in-house server, it must meet the following criteria:

Database Integrity & Security

• Built on a Structured Query Language (SQL) database.
• Prevent deletion of stored data after entry.
• Enable automated log archives, regular data backups, and recovery mechanisms.
• Record every action with user ID, date, time, and effect on the database.

Invoice Format & Controls

• Follow fiscal year-based serial numbering as per Schedule 5.
• Restrict reprints of invoices. Reprinted copies must show "Copy of Original – 1, 2, 3…".
• Allow invoice cancellation with a stated reason and reflect it in audit reports.

Reporting & Export Features

• Provide invoice and sales reports in the format prescribed by Schedule 6.
• Maintain audit trails and activity logs for all user actions.
• Export data in Excel, XML, or PDF formats.

Access Control & User Roles

• Only authorized users should be able to back up the database and log archives.
• Record edits must create a new version instead of overwriting existing entries.

Documentation & IRD Integration

• Include user manuals in Nepali or English.
• Integrate with IRD’s Central Billing Monitoring System (CBMS) via Web API.

Digital Payments & Tax Rebates

If your software integrates with payment systems:

• Must send 10% VAT rebate details to the payment service provider as per Schedule 8.
• Log all transaction activities related to billing and payments.

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Additional Requirements for Cloud-Based Software

Using a cloud-based billing platform? You must meet all the above general requirements plus the following conditions:

Server Location & Access

• The central server must be located inside Nepal.
• Inform IRD and relevant government offices about the server location in advance.
• Allow IRD access to the server upon request.
  
  

Using Third-Party Hosting? Here’s What You Need:

• Your hosting provider must be registered in Nepal.
  
• The server must be physically located within Nepal.
• Implement a multi-tenancy architecture so that each customer’s data is stored separately.
• Sign a formal agreement (as per IRD format) between:
  
  • You (the user),
  • The software provider, and
  • The server provider.
• Submit this agreement to the IRD.

Hosting Server Outside Nepal (In Case of Multinational Companies Only)?

In case your main server is located abroad:

• You must store invoice activity logs on a separate audit server within Nepal.
• IRD must be notified of the server’s location and granted access.

Quick Comparison Table

Final Thoughts

Whether you're building your own billing software or using a third-party solution, it's critical to ensure IRD compliance from day one. Non-compliance can result in operational disruptions and penalties.

If you're looking for an easier way to stay compliant, platforms like Tigg are already fully aligned with IRD guidelines, both for general use and cloud environments. Tigg helps you issue valid invoices, manage reports, and stay audit-ready at all times.

Need Help Navigating IRD eBilling Standards in Nepal?

Reach out to our team to learn how to ensure your billing system meets all legal and technical requirements. Call/Whatsapp us at 9801236611.

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