Multilateral Tax Engagement

The world is witnessing an increasing interdependence. As global dependency deepens, Nepal must navigate this complexity. And for doing so, it needs to be engaged at both the bilateral and multilateral levels, even in highly technical areas such as international taxation. For many years, Nepal’s tax engagement was limited to only a few countries at the bilateral level, having tax cooperation agreements (Double Taxation Avoidance Agreement) with only 11 countries, and key treaty provisions remained to be utilised, such as Exchange of Information (EOI) and Mutual Agreement Procedures (MAP).

In recent days, the country has begun to expand its tax diplomacy beyond bilateral cooperation and has commenced to expand its foothold on the multilateral front. This effort takes Nepal into such a territory where it can contribute meaningfully to setting global tax rules, beyond merely being a rule-taker. By using a multilateral forum, Nepal makes its tax system modern, improves financial integrity, participates in the global race of transparency, and exchanges tax-related information. These efforts ultimately help to protect the tax base and increase domestic revenues. 

The notable milestones in this journey include Nepal’s recent accession to the OECD Global Forum for Transparency and Exchange of Information for tax purposes and Nepal’s participation, for the first time, in the UN Committee of Experts on International Cooperation in Tax Matters recently held in New York. This membership enables access to the tax data and financial accounts that matter to Nepal, held across 170 plus members countries, both automatically and upon request. 

Nepal participates in this forum’s activities and its Common Reporting Standard (CRS) framework on an equal footing. The UN tax committee meeting is a critical platform to set a global game plan for international tax cooperation for developing countries. These engagements have elevated Nepal’s standing from taker to maker of the global rules related to international tax diplomacy, effectively advocating the pressing tax challenges of developing countries at global stage. 

In addition, Nepali diplomat Mr. Lok Bahadur Thapa, as the President of Economic and Social Council (ECOSOC) of the United Nations, chairing the 2026 Special Meeting on the International Cooperation in Tax Matter in United nations’ Hall, highlighting the need for strong tax institution for domestic resources mobilisation is yet another masterstroke for Nepal’s journey towards multilateral tax avenue. 

Domestic revenue mobilisation has been more critical than ever before. Our experience suggests that only domestic resources are the key to development and public goods. As Nepal is sets to graduate from LDC, it has been more critical to meet the growing demand for the public investment following the withdrawn of LDC support measures. In this backdrop, Nepal’s attempt towards domestic revenue mobilisation could be more effective if we contribute to setting global tax norms, share tax-related information among countries, and strengthen our voice at the global stage in today’s increasingly global and interconnected world.  

In the modern world, where AI and seamless virtualisation are the drivers of value creation and productivity growth, countries can double this blessing if they cooperate. Multilateral cooperation is fundamental to protecting revenue, combating treaty shopping, and ensuring double non-taxation. In this context, Nepal’s proactiveness towards multilateral tax cooperation has been a progressive journey. 

Nepal cannot increase its revenue simply by looking within its borders and fencing itself tightly. We must strengthen our partnership with the outside world with strong preparation at home.  For this, Nepal must prepare its domestic statutory and regulatory frameworks compatible with global standards, train its human resources, and strengthen digital frameworks for data protection and cyber resilience.