Technology Companies Selling Nepali User Data Now Liable for Tax

Kathmandu: The government will now tax income earned by technology companies like Meta, Google, and X from selling data of Nepali users. This provision has been introduced under the Digital Service Tax Procedure, 2082 issued by the Inland Revenue Department.

The procedure treats the sale of electronic services provided in Nepal by non-resident (foreign) companies and the sale of data collected from Nepali users as separate taxable transactions. It states: “The transaction value of data collected from users in Nepal by a non-resident person will be taxed at the rate of two percent.”

All foreign companies with an annual turnover of more than Rs 3 million will be required to register and pay tax under this rule.

According to the procedure, “The total annual value of electronic services provided to users in Nepal and the sale of data collected from users in Nepal shall not be taxed under the Digital Service Tax Procedure, 2082, but if the transaction exceeds that amount, the entire transaction amount shall be taxed.”

With this, technology companies will now pay a two percent tax on income earned from collecting the interests, behavior, location, and other personal details of Nepali users, and selling or using them for advertisers or other third parties.

These companies have been generating billions of dollars through targeted advertising based on users’ digital footprints. Now, a share of such earnings will also contribute to Nepal’s revenue.

For implementing this rule, the government has defined certain conditions to determine whether a transaction took place in Nepal. For example, using a Nepali IP address to access services or using payment systems of Nepali banks and financial institutions will be considered transactions in Nepal.

 

पछिल्लो अध्यावधिक: साउन ३०, २०८२ १०:५६

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