The yearly compliance cycle for a private company in Nepal
Registering a private limited company takes a few days. Keeping it in good standing is a job that repeats every fiscal year, whether or not the company traded. This guide walks through the full cycle so you know what is due, when, and what happens if it is missed.
The fiscal year
Nepal's fiscal year runs from Shrawan 1 to Asar end (mid-July to mid-July). Every deadline below is counted from that year.
Every month
- VAT return and payment (VAT-registered companies): by the 25th of the following Nepali month, even if there were no sales.
- TDS deposit and return: tax withheld on salaries, rent, service fees and similar payments, within 25 days after the month ends.
- Social Security Fund: contributions for covered employees, monthly.
Three times a year: estimated (advance) tax
| Due by | Cumulative share of the year's estimated tax |
|---|---|
| Poush end | 40% |
| Chaitra end | 70% |
| Asar end | 100% |
After the year ends
- Close the books and prepare financial statements under NFRS, NFRS for SMEs or NAS for Micro Entities, whichever applies.
- Audit: an independent registered auditor audits the accounts and signs the audit report. Every company needs this, including dormant ones.
- Board meeting: approves the financial statements and calls the annual general meeting (AGM).
- AGM: shareholders adopt the accounts and appoint the auditor for the next year.
- Income tax return (D3): due within three months of year end (Ashoj end), extendable by up to three months on request. Pay any balance tax and obtain tax clearance.
- OCR update (अद्यावधिक): file the share details (section 51), the audit report with signed financial statements (section 80(2)) and the auditor appointment (section 111) on the OCR CAMIS portal.
A simple yearly calendar
| When | What |
|---|---|
| Every month | VAT and TDS returns, SSF contributions |
| Shrawan to Ashoj | Close the books, prepare financial statements, start the audit |
| Ashoj end | D3 income tax return due (or request an extension) |
| Poush end | First advance tax instalment; extended D3 deadline; AGM and audit usually complete |
| After the AGM | Share details, audit report and auditor appointment filed at OCR |
| Chaitra end | Second advance tax instalment |
| Asar end | Final advance tax instalment; fiscal year closes |
What happens if a year is missed
OCR fines each late filing, for each fiscal year, separately, based on paid-up capital and how late the filing is (section 81 of the Companies Act 2063):
| How late (after the deadline) | Paid-up up to Rs. 25 lakh | Up to Rs. 1 crore | Above Rs. 1 crore |
|---|---|---|---|
| Up to 3 months | Rs. 1,000 | Rs. 2,000 | Rs. 5,000 |
| 3 to 6 months | Rs. 1,500 | Rs. 3,000 | Rs. 7,000 |
| 6 to 12 months | Rs. 2,500 | Rs. 5,000 | Rs. 10,000 |
| More than 12 months | Rs. 5,000 × years late | Rs. 10,000 × years late | Rs. 20,000 × years late |
Only the band the delay falls in applies; the amounts don't add up. A small company filing 9 months late pays Rs. 2,500 for that filing. At 19 months late it pays 2 years × Rs. 5,000 = Rs. 10,000, because part of a year counts as a full year. This applies to each filing, for each fiscal year.
Late auditor appointment information is charged separately at Rs. 200 a month, up to Rs. 1,000 per fiscal year. On the tax side, a late D3 return attracts a fee under section 117 and unpaid tax carries 15% a year interest under section 119. A small company three years behind faces around Rs. 64,000 in OCR fines alone, and more than Rs. 1.4 lakh once tax fees and interest are added. Use our OCR fine estimator to see a figure for your company.
Dormant companies
A company that stopped trading still has to complete the audit, D3 return and OCR update every year until it is formally closed. If you don't plan to use the company again, closing it properly stops the yearly cost, but the past filings need to be in order first.
We handle the full cycle for our clients. See OCR renewal and company compliance or book a consultation.
This article is general information based on the law as we understand it at the time of writing. It is not tax or legal advice for your situation. Confirm details with the Inland Revenue Department, Department of Customs or Office of the Company Registrar, or talk to us.