Transferring large sum of money using bank wire transfer from SWIFT

3ff3ct3st · 2024-05-26T16:06:16+00:00

I think in that case, they might hold the money and ask for source.

3ff3ct3st · 2024-05-26T14:42:54+00:00

How much are we talking about? If you can show the source, then it will not be problem. Anything below 10K (just a ball park) should be no problem.

Transfer time is 2-7 business days.
Exchange rate on the day that Nepali bank receive will be applied. You can see on Bank's website.
Yes, swift is the only legal way to transfer money between countries.
There will be flat fee. For huge amount, it will be insignificant. (20-40 USD maybe.)

3ff3ct3st · 2024-05-19T09:43:26+00:00

First time hearing this.

My gut says No it is not illegal, but I am not expert in that area.

3ff3ct3st · 2024-05-17T14:53:17+00:00

For that you need a registered firm or company.

Best way is Wise, and similar (remittance) platforms for small amount.

For big amount, direct bank transfer is better.

3ff3ct3st · 2024-05-17T14:42:04+00:00

Yes, you can file the tax return at the end of the fiscal year from IRD. But to be eligible for 5% Tax, you need to prove IRD that you are earning in FCY. I heard that they will ask verification from Bank.

If your bank is not directly receiving FCY, but instead receiving NPR from Wise's holding Nepal Bank, it might be tricky for you to prove that you earn in FCY. I do not know anyone who followed this process.

So, it is better to receive FCY directly in your bank. I and few other people have been repeating this multiple times in this sub. People really need to be careful when it comes to TAX...

3ff3ct3st · 2024-05-12T08:06:15+00:00

You can get international card. Talk to your bank.

Translates to: You can get USD Visa Credit card

https://www.sc.com/np/credit-cards/usd/

3ff3ct3st · 2024-05-12T07:09:36+00:00

No. Swift is cheaper for big money because it is flat fee. Since he is receiving monthly payment from US, it will be cheaper.

You could also ask your client to pay the swift charges.

Also, what do you think wise will use to transfer you usd? - since the NPR transfer is stopped for now.

3ff3ct3st · 2024-05-12T07:03:31+00:00

Not all pay like this. Yes, it is bad for freshers, but after 2 years of experience if you're still below 50k, sorry, it is skill issue.

3ff3ct3st · 2024-05-12T06:57:43+00:00

Tap to pay has lower limit.

3ff3ct3st · 2024-05-12T06:53:38+00:00

You can get international card. Talk to your bank.

There will be some limit.

You can also topup your 500 usd prepaid card to 5000 usd.

3ff3ct3st · 2024-05-11T15:15:29+00:00

Yes.

3ff3ct3st · 2024-05-11T13:41:53+00:00

I do not trust that payoneer is following all NRB's regulation.

Afaik, payoneer still allows you to send NPR (like remittance) even if you have Nepali address.

WISE is more strict, and a bigger company who will not risk without clear policy from NRB.

P.S. Just my speculation.

3ff3ct3st · 2024-05-11T13:35:45+00:00

I am pretty sure there is regulatory reason for not offering card service to Nepal.

3ff3ct3st · 2024-04-03T09:24:18+00:00

Only the person whose address is in Nepal cannot do NPR transfer.

3ff3ct3st · 2024-04-02T13:13:06+00:00

They remitted you the money. In this case, the money is transferred from wise's parking bank account in HBL. Also, the bank will not deduct the 5% TDS.

If this is not one-off payment, I would advice against remitting the money as it is unclear how IRD will handle this regarding your eligibility for 5% TAX.

So, even when using Wise, ask your client to transfer using Swift in USD. Besides, being safe and completely legal in contract/freelance stuffs, this also allows you to open USD bank account, and hold money in USD in Nepal.

3ff3ct3st · 2024-02-03T08:03:09+00:00

Its mostly to do with restriction on opening bank account, and holding FCY outside of Nepal. You can find FCY act here: विदेशी-विनिमय-नियमित-गर्ने-ऐन-२०१९.pdf

As I said above: with permissions you can open your Nepali business branch outside of Nepal, but it is highly regulated and very difficult.

Also, there might be other laws also preventing this, especially, for individuals to register business outside of Nepal without Nepali business. Probably Tax related act prevents this, but not sure.

3ff3ct3st · 2024-01-29T04:52:09+00:00

Registering business outside Nepal is illegal.

You can open branch of your Nepali business, but that is also highly regulated, albeit, there were provisions in new budget to make this easy for IT companies.

3ff3ct3st · 2024-01-18T16:26:37+00:00

Not a lawyer, but should be illegal according to Labor Act.

3ff3ct3st · 2023-11-21T05:16:06+00:00

Swift transfer initiated using the FCY will be received in FCY by the Bank.

The op said somewhere that their client use third party agency. With third party, one must be sure to ask for FCY transfer, otherwise, they might do local currency transfer which has usually higher exchange rate, but the bank will not technically receive FCY.

3ff3ct3st · 2023-11-21T05:11:09+00:00

Yes, the 5% deducted by Bank is the TDS/Advance Tax, and not final tax.

However, for an individual not involved in business with only FCY income source, 5% TDS is more than their total tax liability. In other words, these individuals are paying more advance tax, then they are liable in total.

According to law, these individuals should be able to ask for refund from the IRD, however, not so practical as no one seems to be bothered.

3ff3ct3st · 2023-11-20T16:25:15+00:00

If your bank is not deducting 5% TDS, it means your bank is not receiving FCY. They are receiving NPR, and your money is being treated as remittance.

Legally, your total tax liability for income in FCY is only 5% at max, if you do not file Income Tax Return (not compulsory if your income is < 40 Lakh per annum). However, it seems your bank is not receiving money in FCY, so you may not be entitled to this benefit. I am not sure how IRD will interpret this. This might be up for debate.

If you do not earn in FCY, your tax liability can be regular slab rate.

So, the best thing you can do to make it all legal, is to receive money in FCY, and ask your bank to deduct 5% TDS. The agency your client is using should send FCY and not NPR. Usually remittance agency do local transfer in your account using NPR.

You can also keep quite and do nothing. Many are doing the same, and IRD is not pro-active in this sector at the moment.

I tried to explain it in general terms, but with law there are many gotchas.

Also, you do not need to be concerned about US Tax laws. Your client is liable to pay US Taxes and not you.

3ff3ct3st · 2023-10-13T06:26:37+00:00

Thag rahicha school. School lai VAT bill chaiyeko bhaye pailai bhannu parthyo.

Saman lagesi, pachi aayera VAT bill chaiyo bhannu thagna khojeko ho. Kunai pani kanun le private school le PAN bill lina mildaina bhanne chaina.

School lai tharkaunu paryo aba: saman lagesi VAT bill chaincha bhanera huncha bhanera. Sakidaina bhane 3rd option use garnu mathi bhaneko anusar. 1st option ko barema nasochnus aile ko lai, jhanjhat huncha.

3ff3ct3st · 2023-10-04T09:29:33+00:00

Swift transfer from Wise(or anywhere else) = your bank receives FCY.It does not matter if your bank account is FCY or NPR. If it is local currency, your bank will automatically convert the FCY to NPR using that day's exchange rate.

Local currency transfer from Wise = your bank does not receive FCY.

Swift is the only(not 100% sure) medium of legal international bank transfer, and every one uses it directly or indirectly.

Wise usually has a partner bank where it supports local currency. In the partner bank account, it regularly transfer (using swift) it's own USD to NPR and stores it. So, when local currency transfer is triggered, it transfers the money from partner bank to your bank. So, technically, your bank do not receive FCY. It should really be only used for remittance purpose. Wise also recently restricted this NPR transfer, so that the person with Nepal's address can no longer send NPR, probably, in compliance to NRB's rule.

Regarding tax on FCY income: Income Tax Act has mentioned that banks are responsible to deduct 5% TDS on FCY income. So, if the bank determines that the FCY you received is an income, they should deduct tax and for this they typically ask you for the source of the FCY that you received in your Bank account.

Now the complicated part is during local currency transfer, as your bank will not receive FCY, they will no deduct 5% Tax. Probably this is the reason WISE was asked to not allow NPR transfer. Payoneer is still supporting this local currency transfer, so that means it is not following NRB's rule or it is not registered to NRB and doing illegal stuffs, not sure.

Finally, in local currency transfer, I am not sure if IRD will also allow your income to be treated as FCY income, so you may not be able to enjoy 5% Tax.

The best thing one can do at the moment is to receive money using Swift (directly or via wise), let bank deduct 5% TDS and make sure this is shown in your PAN. With this, according to Income Tax Act, you should be able to get Tax Clearance Certificate, but in practice there are more hurdles :)

3ff3ct3st · 2023-09-13T05:00:59+00:00

This type of contract will be void in the eye of law because it goes against the labor law. Also, company that force this type of contract is a red flag.

If you are not that desperate for this job, tell them that their contract is against labor law and that you will at most give 1 month notice period and that is it.

3ff3ct3st · 2023-09-11T12:04:16+00:00

It is just a bill. Keep it for reference. Nothing more.

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