For any owner of a Cypriot company, there are six must-know requirements that cannot be overlooked.
Read this article to get your ducks in a row and ensure compliance for the fiscal year.
1. Annual returns – All Cyprus companies are required to hold a yearly General Meeting and file an annual return with the Registrar of Companies. A return outlines changes that took place with the shareholders, director or secretary of a company. Following the meeting, companies are given 42-days to complete and file a return. However, new companies don’t need to file in the year of inception, provided that no more than 18 months elapse from incorporation to the first filing date.
2. VAT reports – A Cyprus company that is involved in trading or activities must register with the VAT department. This does not apply for holdign companies. A VAT registered company must file quarterly – even if no transactions occurred during the quarter. Keep in mind that quarterly filings do not follow the calendar year, but rather the periods set by tax authorities.
3. Audited accounts – Companies are required to complete financial statements compliant with International Financial Reporting Standards, and certain companies must appoint an approved local auditor to inspect the financial statements. Statements are due to the Registrar of Companies, along with a company’s annual report, by Dec. 31 following the fiscal year being audited. However, small companies are exempt from audited accounts as long as during the financial year they do not exceed two of the following:
- Gross assets of €3,400,000
- Net turnover of €7,000,000
- 50 employees
4. Tax returns – Companies receiving income from within and outside of Cyprus must maintain books and records to prepare annual financial records, while companies meeting certain exemption criteria can file a return based on audited financial statements. Annual tax returns are filed by Dec. 31 of the following tax year, and temporary tax returns are due by Aug. 1 of the tax year, payable in three equal installments. Payments are made during the next tax year on Aug. 1, Sept. 30 and Dec. 31. Remaining balances are paid by Aug. 1 of the following tax year. Exempt companies, as well as those that file via an accountant, might be obligated to submit their tax return electronically. In such a case, the deadline is extended by three months.
5. Annual levy. Every Cyprus incorporated company is obliged to pay a yearly annual fee to the government; this is called the Annual Levy. The Annual Levy is €350 for every company and is payable from the year of the company’s inception. After the year of registration, the annual levy must be paid by the latest, 30th of June of each year. In the case of a group of companies the total amount payable is capped at €20.000.
Late Payment Will Result In The Following Penalties:
10% penalty when there is up to 2 months delay (up to 31/08): Total amount €385,00
30% penalty when there is delay between 2 to 5 months (up to 30/11): Total amount €490,00
Non-payment of the annual levy to the Cyprus Registrar of companies will result in deregistration.
You can pay the annual levy by visa card online.
As from March 2021 all Cypriot companies are obliged to register the details of their beneficial owners in an electronic register set up by the Registrar of Cyprus (“the Register”). The Register will be publicly accessible from January 1, 2023. Failure to register carries penalty.