What are the obligations regarding the accounting records of a Cyprus company?
Businesses in Cyprus are legally obligated to provide accounting records related to their business activity dating back seven years from the current date.
You must appoint an approved auditor to check your bookkeeping and prepare annual financial statements (January-December). For convenience, many companies outsource their bookkeeping altogether. The accountant or administrator providing services must be registered and approved by The Institute of Certified Public Accountants of Cyprus (ICPAC).
The types of companies and business obligations.
Most companies in Cyprus are incorporated as limited liability companies that can also form holding structures carrying out business activity domestically and internationally.
The following structures can be registered:
a) A company;
b) A partnership;
c) A business name;
d) A European company (SE);
e) An overseas company.
Read more about Cyprus company formation
Regardless of the type, companies must have a Cypriot resident as a director. If the company owner is a foreign citizen who resides abroad more than 183 days per year, the company must appoint an additional person as director. This could be a regular director or a legal representative like a lawyer.
Basic company obligations
1. VAT
- VAT declaration every three months;
- Online procedure;
- VAT payments are due within 40 days of declaration;
- Possible to have VAT returns.
2. Company levy
- A fixed €350 levy is due regardless of company size;
- Payment due annually by the 30th of June;
- Companies can pay online.
3. Annual board meeting
Companies must hold an annual meeting to review important topics and approve financial statements.
4. Audited financial statements
Audited financial statements must be submitted to the Department of the Registrar of Companies and Official Receiver within 2 weeks of the annual board meeting via form HE32.
Company taxation
5. Corporate income tax
- 12.5% on the company’s net profit;
- Tax form IR4 for year n must be submitted to the tax authority by end of year n+1 based on the audited financial statements signed by company director and auditor.
Learn everything about Cyprus corporate tax here
6. Defense tax
Only applies to residents (citizens and those that reside 183+ days per year in Cyprus);
It is calculated as 20% x 87.5% of a company’s net profit.
Should you require more information regarding your company, or thinking to register one, you may contact our advisors here.
