Up towards the ceiling in the niche, I would place the same trim as in the other inner corners.
To finish the paneling at the outer corner, I would cut away 8-10 mm from the panel and attach a wooden trim that aligns with the wall and the panel, which would then be stained/glazed in the same white as the panel or painted in the same color as the wall. This is just to cover the end grain.
I would plane down the outer corner of the trim to a small radius to make painting easier.