No tax, duty or fee shall be levied on the products, machinery, equipment, tools and raw materials utilized by an export promotion industry.

Industries are entitled to add one-third to the rate of depreciation allowed under the existing income tax laws.

Industries in operation which diversify production through reinvestments or expand installed capacity by 25 percent or more or modernize technology or develop ancillary industries are entitled to a deduction of 40% of new additional fixed assets from their taxable income. Such remission may be deducted on a lumpsum or on an installment basis within a period of 3 years.

Industries are entitled to a reduction of up to 50 percent from the taxable income for the investment on process or equipment, which has the objective of controlling pollution or which may have a minimum effect on the environment. Such remission may be deducted on a lumpsum or on an installment basis within a period of three years.

Pre-operating expenses incurred in connection with skill development and training will be allowed to be capitalized.

10 percent of the gross profit is allowed as deduction against net income on account of expenses connected with technology or product development and skill enhancement.

No income tax is imposed on dividends earned.

An industry donating an amount of up to 5 percent of its gross income to any school, college, university, hospital, religious place and in social activities is entitled to a deduction of such donated amount in course of assessing the taxable income.

Up to 5 percent of the gross income spent for the advertisement of the products or promotion services, hospitality and any other similar expenses shall be allowed to be deducted while assessing the taxable income

If an industry provides direct employment to 600 or more Nepalese citizens in a year such industry besides other facilities, is conferred additional 10 percent rebate on income tax for that year.

The customs duty, sales tax, excise duty and premium levied on raw materials and auxiliary raw materials, etc. utilized by any industry in connection with its product during its production shall be reimbursed on the basis of the quantity of the export. Such reimbursement shall be made to the exporter within sixty days after an application to that effect has been duly submitted.

If an industry sells its product within the Kingdom in any foreign currency, the excise duty, sales tax and premium levied on such product and customs duty, excise duty and sales tax levied on the raw materials, auxiliary raw materials, etc., utilized in such product shall be reimbursed. The revenue to be so reimbursed shall be refunded to such industry within sixty days after an application to that effect has been duly submitted.

The customs duty, sales tax, excise duty and premium levied on the production materials of intermediate goods to be utilized for the production of exportable goods and the sales tax and excise duty paid on the production shall be reimbursed to the industry manufacturing the intermediate goods on the basis of the quantity of export within 60 days from the date of export.

If any other industry utilizes locally available raw materials, chemicals and packing materials, etc., on which excise duty or sales tax or both are already imposed, the excise duty, sales tax or both shall be reimbursed to the industry utilizing such raw materials, chemicals and packing materials. The amount to be so reimbursed shall be refunded within sixty days after an application to that effect has been duly submitted.

No royalty shall be imposed if any industry generates electricity for its use.

Double sales tax shall not be levied on the raw materials and products of any industry.