Kathmandu: Foreign tech giants, including Apple, Google, Microsoft, Meta, TikTok, and Netflix, have started paying Nepal’s 2% Digital Service Tax (DST) for providing electronic services to local consumers.

As of now, 20 registered companies are complying with the tax, which was introduced in the ‘Economic Act for FY 2022/23’. The DST applies to companies offering services like digital advertising, cloud computing, and online streaming in Nepal. Companies such as Google, Meta, Amazon, Microsoft, and Apple are among those paying the tax.

Despite the law’s implementation, many foreign companies remain outside the tax system due to unclear provisions regarding mandatory registration. The government has raised the transaction threshold for DST from NPR 2 million to 3 million annually, exempting smaller transactions from the tax.

Government reports show significant revenue losses due to unregistered digital service providers, especially from advertising on platforms like Facebook, which generate billions of rupees from Nepali users.

The law also stipulates penalties for non-compliance, including fines and interest charges for late payments.