Double Tax Avoidance Agreement of Nepal

Double Tax Avoidance Agreement of Nepal: An Overview

Double Tax Avoidance Agreement (DTAA) is an agreement between two countries to avoid double taxation of income and assets. Nepal has signed DTAA with several countries, including India, China, the United States, Korea, and the United Kingdom, to promote investment and trade between the two countries.

The primary objective of DTAA is to avoid the double taxation of income earned by individuals and companies. With DTAA in place, taxpayers can claim tax relief in their resident country, which helps prevent double taxation. It also helps promote international trade and investment by eliminating the risk of double taxation, which can hinder cross-border transactions.

DTAA between Nepal and India

The DTAA between Nepal and India is one of the oldest and most prominent DTAA agreements for Nepal. The agreement was signed in 1991 and has undergone several amendments over the years to reflect changing circumstances.

Under the DTAA between Nepal and India, Nepalese residents are taxed in India only if they stay for more than 182 days in a financial year in India. Similarly, Indian residents are taxed in Nepal only if they stay for more than 183 days in a financial year in Nepal.

The agreement also covers taxes on income from salaries, wages, profits, gains, dividends, royalties, and other sources. The agreement also applies to real property, shipping and air transport, and capital gains.

Impact of DTAA on Nepal`s Economy

DTAA has had a significant impact on Nepal`s economy. It has helped promote foreign investment and trade, creating job opportunities and new industries. It has also helped increase government revenue by reducing the risk of tax evasion.

DTAA has also helped promote cultural exchange and tourism between countries, which has contributed significantly to Nepal`s economy. Overall, it has helped promote Nepal`s economic growth and development.


DTAA is a crucial agreement between two countries in promoting cross-border trade and investment. As a professional, I hope this article has provided you with a quick overview of the DTAA agreement between Nepal and other countries.

Overall, DTAA has had a considerable impact on Nepal`s economy, and new agreements are being negotiated with additional countries to continue to promote economic growth and development.