Understand the annual OCR and IRD filings, audit and practical checklist for a wholly Nepali-owned private company in Nepal
Quick Answer
For an active, wholly Nepali-owned private limited company, annual company compliance in Nepal means keeping proper accounts, having the annual financial statements audited, filing the certified statements with the Office of the Company Registrar (OCR) within six months of the fiscal year end, and filing the income-tax return with the Inland Revenue Department (IRD) within three months. These are separate obligations with separate deadlines; one filing does not replace the other.
The practical next step is to confirm your fiscal year end, review your governance documents and auditor appointment, then prepare the accounts early enough to meet the IRD and OCR deadlines. Do not assume that filing with one authority clears the other.
Key highlights
- Start with your accounting records and auditor. The OCR and IRD filings both depend on complete, audited financial statements.
- A private company does not automatically need an AGM under the Companies Act, but its articles of association or shareholders’ consensus agreement may require one.
- The OCR filing deadline is six months after the fiscal year end; the income-tax return deadline is three months after the income year ends.
- VAT and withholding-tax obligations, where they apply, run on their own recurring calendar and should not be treated as part of the annual return.
- If filings are overdue, assess the tax and corporate backlog together before filing. OCR and IRD fines are separate.
What annual compliance covers for a private company
Annual compliance is not one form or one authority. It is a working cycle of governance, accounting, audit and filings.
| Compliance area | What the company needs to do | Main authority or decision-maker | Usual timing in this route |
|---|---|---|---|
| Company records and accounts | Keep double-entry books and prepare financial statements | Company directors and officers | Throughout the year; statements within six months of fiscal year end |
| Audit and approval | Appoint an eligible auditor and have the accounts audited | Company, under its constitutional documents | Before filings are made |
| Corporate annual filing | Submit the auditor-certified financial statement | OCR | Within six months of fiscal year end |
| Income-tax return | Submit the company’s income-tax return | IRD | Within three months of income year end |
| Conditional recurring tax filings | File and pay VAT or withholding-related obligations where applicable | IRD | Their own recurring deadlines |
The Companies Act requires a company to keep double-entry books and produce audited financial statements; the OCR receives the certified annual financial statement under section 80(2). The Income Tax Act separately requires the income-tax return under section 96. Companies Act, sections 80, 108 and 110; Income Tax Act, section 96.
For a founder or manager, the practical takeaway is simple: use one set of reliable records, but maintain separate trackers for the OCR and IRD. If your business deducts tax at source or is VAT-registered, tax and VAT filing support can help keep those recurring obligations distinct from the annual cycle.
First, confirm the company’s governance and auditor
Before accounts can be finalised, confirm how your company makes shareholder decisions and whether its auditor is properly appointed.
Does a private company need an AGM?
The Companies Act requires an AGM for a public company. For a private company, general-meeting matters follow the articles of association or a shareholders’ consensus agreement. Shareholders can also unanimously agree on another way to make decisions that would otherwise be handled at an AGM. Check your own constitutional documents before deciding that a meeting is unnecessary. Companies Act, sections 67, 76 and 148.
Appoint an auditor before the year-end rush
Every company must appoint a licensed auditor; there is no stated size, turnover or inactivity exemption for a private company. For a private company, the appointment follows the articles or consensus agreement, or a general meeting if those are silent. The appointment must be reported to the OCR within 15 days. A director, debtor in arrears, shareholder holding at least 1% of paid-up capital, or certain close relatives cannot act as auditor. Companies Act, sections 110–113.
Prepare accounts that can support both filings
Keep books in Nepali or English, on a double-entry basis, and normally at the registered office unless the OCR approves another location. Directors and officers are responsible for proper books and annual statements. Companies Act, section 108.
For this private-company route, prepare and obtain board approval for the balance sheet, profit-and-loss account and cash-flow statement within six months of the fiscal year end, then complete the audit. A company with paid-up capital or annual turnover of Rs 1 crore (NPR 10,000,000) must also prepare the separate directors’ report described in the Act. The auditor’s report addresses whether the required information and books were available, whether the accounts agree with the books, and whether misappropriation, loss or accounting fraud was found. Companies Act, sections 109 and 115.
Keep annual statements and underlying accounts safely for at least five years after the relevant fiscal year. That recordkeeping is especially important if a return later needs correction or the company develops a filing backlog.
File with OCR and IRD on separate deadlines
The annual cycle usually becomes manageable once these two filing dates are treated as separate non-negotiable milestones.
File the certified financial statement with OCR
Submit the auditor-certified financial statement to the OCR within six months of the fiscal year end. A private company’s deadline is tied to the fiscal year, not to whether it held a meeting. The OCR handles filings, fine payments and related correspondence through CAMIS. Companies Act, section 80(2).
Separately, keep the OCR’s inventory of shareholders, debenture-holders, capital structure and directors current. Changes must be updated within six months of the change. Companies Act, section 51.
File the income-tax return with IRD
Submit the income-tax return within three months of the end of the income year. A written application made before the deadline can allow the IRD, at its discretion, to grant extensions of up to three months at a time. Income Tax Act, sections 96 and 98.
Companies with assessable business or investment income generally pay estimated tax in instalments: 40% by the end of Poush, a cumulative 70% by the end of Chaitra, and the full estimated amount by the end of Ashad. Instalments below Rs 7,500 are not payable. Income Tax Act, section 94.
If the company withholds tax from payments such as rent, professional fees, contractor payments or salaries, it must remit the withholding and file the statement within 25 days of the end of each month. VAT registration and monthly VAT returns depend on the company’s turnover and activity; do not assume they apply, or do not apply, without checking the position for your business. Returns are generally filed through the IRD taxpayer portal. Income Tax Act, section 90.
Build an annual compliance calendar
Work backwards from the fiscal year end rather than waiting for a filing portal reminder.
- During the year: maintain books, preserve invoices and bank records, and track tax deductions, VAT and instalments that apply.
- After year end: confirm the auditor, complete the accounts and arrange board approval. Check whether your articles require an AGM or another shareholder decision.
- Within three months: complete the income-tax return, unless the IRD grants an extension requested in advance.
- Within six months: submit the auditor-certified financial statement to OCR through CAMIS.
- Whenever company particulars change: update the OCR within the applicable six-month window.
This calendar does not replace monthly filings that apply to your business. Its value is in preventing the annual audit, tax return and OCR return from being left until the same week.
Late OCR and IRD filings: understand the separate consequences
Late corporate and tax filings do not offset each other. Paying an OCR fine does not clear an IRD default, and filing a tax return does not complete the OCR annual return.
| Paid-up capital | OCR fine: up to 3 months late | Next 3 months | Next 6 months | Beyond that |
|---|---|---|---|---|
| Up to Rs 25 lakh | Rs 1,000 | Rs 1,500 | Rs 2,500 | Rs 5,000 per year |
| Rs 25 lakh–Rs 1 crore | Rs 2,000 | Rs 3,000 | Rs 5,000 | Rs 10,000 per year |
| Above Rs 1 crore | Rs 5,000 | Rs 7,000 | Rs 10,000 | Rs 20,000 per year |
Source: Companies Act, section 81 and the OCR fee and fine schedule.
A company that does not distribute profits is fined at the rate for paid-up capital up to Rs 1 crore. Section 81 also provides a separate Rs 200 monthly fine, after one month’s grace, for failing to give other required notices or information. The table is the corporate-filing position; it does not include the company’s independent tax exposure.
For a late or missing income-tax return, the IRD penalty is generally the higher of Rs 100 per month or 0.1% a year of assessable income. A further Rs 5,000 or 0.01% of assessable income can apply if the earlier estimated-tax return required under section 95 was not filed. Late or short instalments and late withholding statements have separate consequences. Income Tax Act, section 117.
If your company has fallen behind
An overdue company is not automatically resolved by filing only the latest year. First list every missing OCR annual return, income-tax return, withholding or VAT period that applies, and every unrecorded corporate change. Then organise the books and audit work needed to produce consistent figures for the outstanding periods.
Because the OCR and IRD filings normally rely on the same underlying accounts, it is usually more practical to understand or bring current the tax periods while preparing the audited statements, rather than treating the two backlogs as unrelated. The OCR periodically publishes notices that may waive part of accumulated amounts under the Companies Act; check its current notices before assuming the full escalated fine applies.
If the business will not continue, do not treat indefinite inactivity as a compliance plan. An unfiled company remains on the register and can continue to accrue obligations and fines. Consider whether company closure in Nepal is the more appropriate next route.
Final annual compliance checklist
- Confirm the fiscal year end, the three-month IRD deadline and the six-month OCR deadline.
- Check the articles or shareholders’ agreement for AGM or equivalent approval requirements.
- Confirm the auditor’s appointment and eligibility; report a new appointment to OCR within 15 days.
- Keep the books current and retain the supporting records.
- Prepare, approve and audit the financial statements.
- Prepare the directors’ report if the Rs 1 crore paid-up-capital or turnover threshold applies.
- File the certified financial statement with OCR through CAMIS.
- Update OCR records for relevant changes in shareholders, capital or directors.
- File the income-tax return and track instalment tax where applicable.
- Keep VAT and withholding-tax obligations on their own recurring calendar.
How Company Darta Nepal can help
Annual compliance becomes difficult when accounts are incomplete, governance records are unclear, the auditor needs information quickly, or OCR and IRD filing dates have been allowed to drift apart. Company Darta Nepal can assess the company’s filing position, help organise the records required for the agreed annual work, and coordinate the agreed OCR filings alongside the relevant compliance process. The first useful step is to assemble the company’s prior returns, accounting records, auditor information and any OCR notices.
Review Company Darta Nepal’s annual company compliance service to discuss the appropriate scope for your company.
