Nepal Digital Services Taxes update

2% DST on digital services launched in July 2022

The Nepalese Inland Revenue Department has updated its Digital Services Tax Act for 2024. The threshold for being subject to the 2% turnover tax digital services within scope has been raised from NPR 2 million to NPR 3 million.  The fine regime has also been confirmed at 15% interest on late payments and 0.1% of tax due for late or unsubmitted declarations.

2022 Digital Services Tax

Napal first proposed a DST for foreign providers of digital services in 2022. This is a turnover tax on a range of digital services providered by non-residents to locals. The DST was introduced in July 2022, and may be subject to revision pending OECD Pillar 1 negotiations.

Nepal’s DST is separate from Nepal VAT on digital services.

The Inland Revenue 2023 last guidance included:

• Confirmation 2% tax on in-scope services:
  • Advertising services;
  • Movies, television, music, over the top (O.T.T.) and other similar subscription based services;
  • Data collection services;
  • Cloud services;
  • Gaming services;
  • Mobile application related services;
  • Online marketplace services and services and goods provided through it;
  • Supply and update of software;
  • Sales of data collected from Nepal resident person;
  • Download of data, images and similar services;
  • Education, consultancy, skill development and training services; and
  • E-book, e-library and e-newspaper.
• Simplified registration proceedure

See our DST country implementations tracker.

Asia Pacific Digital Services Taxes (DST)