Firm Renewal (फर्म नवीकरण) and Ward Business Tax (व्यवसाय कर): The Renewals That Are Not the OCR

Which Renewals Apply to Me?

Three kinds of business, three sets of offices:

The full company calendar is in our annual compliance guide for a Pvt. Ltd.; the firm side starts with the sole proprietorship registration guide.

Ward Business Tax (व्यवसाय कर)

Business tax is one of the taxes the Constitution (Schedule 8) gives to local governments, levied under the Local Government Operation Act 2074. Each municipality fixes rates, discounts and fines in its own yearly finance act (आर्थिक ऐन), so there is no national rate: the same shop pays differently in Kathmandu, Lalitpur or Pokhara.

It is paid at the ward office or the municipality’s revenue section, and the receipt is what people call “ward renewal” (वडा नवीकरण). Firm or company makes no difference.

Worked example: Kathmandu Metropolitan City

The latest finance act Kathmandu Metropolitan City (KMC) has published on its website is the Finance Act 2082, for FY 2082/83. Under it:

• Who pays (s.5(1)). Every person, institution, company or body carrying on a profession or business inside KMC pays business tax at the Schedule 7 rate.
• Annual renewal (s.5(2)). A business that starts after Poush pays a month-by-month share for its first year; after that the business tax renews every year.
• Rent tax first (s.5(5)). At renewal, the house-rent tax owed to the metropolis on the premises has to be shown as paid.
• Closing (s.5(7)). To close, apply in writing to the ward office; all arrears are collected first. Apply within 35 days of the fiscal year starting and no business tax is charged for that year.
• Early payment (s.17(1)). Current-year property, business and rent tax paid by Poush end 2082 earned a 10% discount; s.25 allows three instalments.
• Arrears (s.24). Tax or fees left unpaid from past years attract a flat 10% fine.

Schedule 7 sets the yearly business tax by business type and size. A few lines from it, as they stood for FY 2082/83:

For FY 2083/84, KMC’s Finance Act 2083 took effect on Shrawan 1, 2083. Makalu Khabar reported (republished by Hamro Patro, 18 July 2026) a 10% discount for current-year tax paid by Asoj end and fine waivers on some old arrears. KMC had not posted the 2083 text when we checked, so we could not confirm whether the rates above changed. Treat them as the latest published figures, not your current bill.

Section 6 of the same Act matters for firms: the metropolis itself registers and renews private and Partnership Firms with capital up to NPR 5 lakh, at fees set by Bagmati’s Provincial Trade and Business Act 2076.

Outside Kathmandu

Most municipalities publish their finance act on their .gov.np site. Check your category’s rate, the discount date and the arrears fine there, or ask the ward, rather than assuming the KMC figures.

Firm Renewal (फर्म नवीकरण) for a Sole Proprietorship

Section 5 of the Private Firm Registration Act 2014 leaves the validity period and the renewal fee to the Rules. The Private Firm Registration Rules 2034, as consolidated to the 15th amendment (2080), say:

• Validity. A registered private firm is valid for five years (r.7(1)), and each renewal is for five years (r.7(2क)). A firm registered or renewed earlier keeps the period printed on its certificate (r.7(2)), so check yours.
• When to apply. At least 35 days before the period ends (r.7(3)), with a copy of the PAN certificate and proof of tax paid for the previous fiscal year. A firm with capital of NPR 50 lakh or more also attaches its audit report and annual turnover statement.
• Fee. 10% of the registration fee for the firm’s capital band (r.7(4)). A firm renewing at a provincial or municipal office may be charged under provincial law instead.
• Every year in between. The proprietor files an annual turnover statement (Schedule 2kha) with the registering office within 35 days of each fiscal year ending. Not filing it is one of the grounds on which the office can cancel the firm (r.9क(3)).

Late renewal. An owner who misses the date can apply, giving reasons, within ten years of the expiry (r.7(5)). The renewal fee is then multiplied (r.7(5क)): 2× within three months of expiry, 3× for the following year, 4× for the five years after that, and 5× up to the ten-year limit. Past ten years, the department moves to cancel the firm under Section 7B of the Act. Closing a firm voluntarily also means paying the outstanding renewal fees and fines first (r.9क).

The renewal fee is nominal, as our sole proprietorship guide says; the period on your own certificate decides when it falls due.

Firm Renewal for a Partnership Firm

The Partnership Act 2020 is stricter on timing and lighter on cost. Section 11 requires every registered Partnership Firm to renew within 35 days of each fiscal year ending. The fiscal year ends on Ashad end, so the window closes in the first days of Bhadra. No firm may trade under its name without renewal. The fee is set in Schedule 2(kha):

The Act’s own fine for breaching Section 11 is up to NPR 50 per partner (s.41). The real exposure is Section 11B: a trading firm that does not renew can be cancelled after a hearing, and its partners cannot register a firm with the same objective for a year. We could not find a published rule for the late charges offices add, so ask for a written figure before paying arrears.

Which office, and can I renew online?

Under the Rules, a trading firm in the Kathmandu Valley renews at the Department of Commerce, Supplies and Consumer Protection (DoCSCP); elsewhere at the district commerce office or the office the department designates. An industrial firm goes to the Department of Industry or a Cottage and Small Industry office. Both Acts let each province run firm registration and renewal under its own law (Private Firm Registration Act s.5A, Partnership Act s.11C), and many firms now deal with a provincial office instead.

DoCSCP runs an online system for firm registration, renewal, amendment and cancellation, with a published user manual for getting a login and a separate online-payment guide (Baisakh 31, 2083). In Bagmati, The Rising Nepal and ShareSansar (July 2026) and Kantipur (Ashwin 2083) reported that the province’s Industry, Commerce and Tourism offices are moving industry registration and renewal online; those reports do not say whether firm renewal is included.

Bagmati’s FY 2083/84 Waiver of Old Firm-Renewal Fines

Bagmati Province’s budget for FY 2083/84, presented to the Provincial Assembly by Economic Affairs and Planning Minister Prabhat Tamang, includes a fine waiver for firms that registered and then stopped renewing. As reported by Hamro Patro on 16 June 2026 (from Nepal Views):

• a business that pays its renewal fees up to FY 2082/83 by Poush end 2083 (14 January 2027)
• has its fines from before FY 2081/82 waived in full.

Three limits. The renewal fees are not waived, only fines. Fines from FY 2081/82 onward appear to remain payable. And it is provincial: the report does not say whether it reaches a firm registered at the federal DoCSCP. We have seen the reporting, not the provincial Finance Act text, so we confirm with the registering office before quoting a client.

Does a Company Need a PAN Renewal?

No. The Inland Revenue Department’s own answer is that “PAN is a permanent identity card. It does not need to be renewed.” What keeps it in good standing is filing returns, nil ones included; an unused PAN can be suspended. See our guides to PAN registration and PAN suspension and cancellation.

So a Pvt. Ltd. company’s yearly list is: the ward business tax, the IRD returns, and the OCR annual return with audited accounts. Falling behind at the OCR is a separate problem, set out in company renewal (adhyawadhik).

What Trips Owners Up

The problems most commonly reported, by owners who come to us and in local news:

• Treating one receipt as both renewals. The ward receipt and the firm renewal are different offices, laws and dates.
• The landlord’s rent tax. KMC will not renew business tax until the premises’ house-rent tax is paid, so a landlord’s arrears become the tenant’s problem.
• Registered but never renewed. A KMC revenue officer told Nepallive (Jestha 2081) that many businesses are registered with the metropolis but have not renewed their business tax. Arrears fines and renewal multipliers grow quietly.
• Walking away from a firm. A firm is not closed until it is cancelled at the registering office and the ward, and both collect arrears first.
• Forgetting the turnover statement. A five-year certificate does not excuse the annual turnover statement.

Frequently Asked Questions

How often does a sole proprietorship firm renew in Nepal?

Under the Private Firm Registration Rules as amended to 2080, every five years, applying at least 35 days before expiry. A firm registered earlier keeps the period on its certificate. In between, it files an annual turnover statement.

What is the Partnership Firm renewal fee?

Between NPR 100 and NPR 300 a year, by capital, under Schedule 2(kha) of the Partnership Act 2020. Renewal is due within 35 days of each fiscal year ending. A firm that does not renew can be cancelled.

Does a Pvt. Ltd. company pay ward business tax?

Yes. The municipality levies business tax on anyone doing business there, firm or company; Kathmandu’s Finance Act names companies expressly.

Does a company need to renew its PAN?

No. The IRD says a PAN is permanent and does not need renewal. The OCR annual return is a separate yearly obligation.

What does the Bagmati firm renewal fine waiver cover?

As reported on 16 June 2026, a firm that pays renewal fees up to FY 2082/83 by Poush end 2083 (14 January 2027) has its fines from before FY 2081/82 waived in full. The fees themselves are payable, and the report does not say whether firms registered at the federal DoCSCP are covered.