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Fulfill your corporate tax obligations seamlessly during equity structural shifts. Our premier business consultancy Kathmandu assists companies navigating a Change in control (दफा ५७), ensuring seamless filing, compliance with asset valuation, and complete alignment with the Inland Revenue Department (IRD) regulations.
₨ 10,000.00
Under the Nepalese corporate tax framework, a Change in control (दफा ५७) occurs if the underlying ownership of an entity shifts by 50% or more within a continuous block of three fiscal years. Procedurally, this triggering event alters the legal tax positioning of the entity, forcing a deemed disposal of all its net assets and liabilities at prevailing market value. To maintain rigorous Tax Compliance Nepal, companies must split the corresponding income year into two distinct tax periods—pre-change and post-change—and calculate their taxable income independently for each period while adhering strictly to specific asset revaluation methodologies.
Pursuant to Section 57(1) of the Income Tax Act, 2058, an entity undergoing a 50% or greater cumulative ownership shift within a three-year window is legally deemed to have disposed of its entire property and obligations. According to the Income Tax Directives and Section 57(3), the company is required to prepare separate financial statements for the periods before and after the control shift, filing independent tax returns for each split period. Furthermore, Section 57(2) imposes strict anti-avoidance restrictions: the entity is permanently barred from carrying forward unabsorbed interest expenses under Section 14(3), deducting accumulated business losses under Section 20, or adjusting bad debt write-offs under Section 25(1) that were incurred prior to the control modification.
Failing to accurately execute a deemed disposal, split accounts, or report a change in underlying control triggers severe financial penalties and administrative blocks under Chapter 22 of the Act. Pursuant to Section 117, late filing of the mandatory split returns attracts an administrative fee calculated at 0.1% per annum of gross turnover or Rs. 100 per day (whichever is higher) for corporate entities, while any tax liability arising from the unrecorded deemed asset disposal incurs a mandatory interest charge of 15% per annum under Section 119, compounded from the initial due date. Furthermore, omitting to update company details locks your online tax portal, invalidates invoice tracking, and causes the IRD to completely halt the issuance of the physical Tax Clearance Certificate (कर चुक्ता).
