Prakash Kafle/Kathmandu. In a significant standoff with Nepal’s tax authorities, the social media giant TikTok has announced it will no longer pay Value Added Tax (VAT) for its operations within the country. Despite having contributed a total of Rs. 13.6 million in VAT over the last two fiscal years (2080/81 and 2081/82), the company has failed to remit any VAT payments for the current fiscal year 2082/83. Following this lapse, the Large Taxpayers’ Office (LTO) summoned TikTok’s local representative, Vicky Agrawal, to explain the non-payment. During the meeting, Agrawal reportedly argued that because TikTok is distributed through Google’s Play Store and Apple’s App Store—both of which are registered tax-paying entities in Nepal—the VAT burden should be covered by those platforms rather than TikTok itself.
The government, however, remains skeptical of this “double taxation” defense. Chief Tax Administrator Kedarnath Sharma stated that while TikTok’s representative claimed they continue to pay the Digital Service Tax (DST), the office has demanded official documentation to prove that their VAT liabilities are indeed being settled via third-party platforms. The Ministry of Finance had previously initiated an informal probe into the matter following media reports, checking if TikTok had surreptitiously registered a local subsidiary to alter its tax status. Finding no such local registration, the LTO is now reviewing existing legal frameworks to determine if TikTok’s refusal constitutes a breach of the Electronic Services Tax regulations.
This dispute highlights the growing challenges Nepal faces in regulating multinational tech giants. Since the implementation of digital tax laws in 2022, 21 global companies, including Meta, Google, and Netflix, have been brought into the tax net, contributing over Rs. 1.13 billion in VAT and Rs. 119 million in DST. Meta Platforms Ireland (Facebook) remains the largest contributor, having paid over Rs. 520 million to date. As the LTO awaits TikTok’s supporting documents, the outcome of this case is expected to set a major precedent for how “platform-within-a-platform” services are taxed in Nepal’s evolving digital economy.
नेपालमा भ्याट नतिर्ने टिकटकको अडान, सरकारसँग टकराव:गुगल–एप्पललाई देखाउँदै भ्याटबाट पन्छियो
