All Companies registered in Cyprus have the obligation to keep accurate accounting records to prepare and submit to the Registrar of Companies a copy of their annual Audited Financial Statements.
The House of Representatives recently introduced amendments to the Cyprus Company Law, Cap. 113, reducing the scope of this obligation. These have been introduced by the Companies (Amending) (No. 2) Law of 2022, passed on the 9th of June 2022.
Financial Statements submitted for review, instead of an audit
Pursuant to the amendments introduced, Companies with a net turnover which does not exceed €200,000 and which have assets with value which does not exceed €500,000, may submit their Financial Statements for review by a licensed auditor or audit Firm as provided by the Auditors Law. This is instead of preparing Audited Financial Statement.
Any income from rent, interest, dividends and royalties will need to be taken into consideration when calculating the net turnover of the Company.
Exceptions
The amending law includes specific exceptions for some categories of Companies which are still obliged to submit their Financial Statements for audit. These exceptions include Companies which are subject to regulation and supervision by certain Authorities in Cyprus, such as banks and insurance companies, groups of Companies where a parent Company is required by to prepare Consolidated Financial Statements, or subsidiary companies whose parent company must prepare Consolidated Financial Statements, among others.
Coming into Effect
The amending law will apply as of the 1st of January 2023, to the Financial Statements of Companies ending on the 31st of December 2022, or any subsequent date.
We are expecting further guidance from the Tax Department and the Registrar of Companies on how this will be implemented in practice.
Should you wish to find out more, contact our team at info@paraschou.com.cy.