International tech giants, Google, Facebook, and Microsoft registered in Nepal’s taxation system

July 5, Kathmandu: Nepal has successfully registered six international companies, including Google, Facebook, and Microsoft, within its taxation system.

The move comes as the government implemented the Digital Service Tax provision under the Financial Act, aiming to bring foreign companies operating in the digital services sector under the tax regime.

The Tax Officer at the Large Taxpayers’ Office, Sadhuram Pudasaini, confirmed the registration of these six companies in Nepal.

Among the registered companies, three have offices in Singapore: Google Asia Pacific Private Limited, Microsoft Regional Sales Private Limited, and LinkedIn Singapore Private Limited.

The remaining three companies are NCS Pearson Inc, based in Bloomington, USA; EBSCO, headquartered in Wilmington County of New Castle in Delaware, USA; and Meta Platforms Ireland Ltd, located in Dublin, Ireland. Consequently, popular social networking platforms like Instagram, WhatsApp, and LinkedIn have also been registered in Nepal.

Despite the successful registration of these companies, there are still flaws and weaknesses in the provision, leading to many other companies in the information technology sector operating outside the taxation system.

Consequently, Nepal is losing substantial revenue by not including digital transaction-involved companies and social networking sites within the tax regime.

According to a report from the Revenue Consultation Committee, Nepal had over 13.3 million Facebook users in 2022, contributing to Facebook’s annual earnings of more than Rs 60 billion through advertisements targeted at Nepali users.

This highlights the significant revenue potential that remains untapped due to the absence of comprehensive taxation regulations for all companies in the information technology sector in Nepal.