Six international companies working in the field of information technology and rendering digital services, including Google, Facebook, and Microsoft, have been registered in Nepal's taxation system.

The government introduced the Digital Service Tax provision under the Financial Act to ensure that foreign companies providing electronic services are subject to taxation. Sadhuram Pudasaini, Tax Officer at the Large Taxpayers' Office, confirmed the registration of these companies in Nepal.

Among them, three companies with offices in Singapore (Google Asia Pacific Private Limited, Microsoft Regional Sales - Private Limited, and LinkedIn Singapore Private Limited) and three others (NCS Pearson Inc, EBSCO, and Meta Platforms Ireland Ltd) have been registered.

This registration includes popular social networking sites such as Instagram, WhatsApp, and LinkedIn. However, due to flaws in the provision, many companies in the IT sector remain outside the taxation system.

Although there are provisions for taking action against foreign companies that fail to pay taxes, there is no clear mention of the actions to be taken against unregistered companies. Consequently, numerous companies in the information technology sector are currently operating outside the taxation system in Nepal.

A government study has revealed a significant revenue loss resulting from the absence of taxation for companies engaged in digital transactions and operating social networking sites in Nepal.

 According to a report by the Revenue Consultation Committee, citing data from www.datareportal.com, Nepal had over 13.3 million Facebook users in 2022. Based on statistics, Facebook alone earns over Rs 60 billion annually through advertisements viewed by Nepali users.