Features of accounting for companies in Cyprus

All companies that are registered in Cyprus must keep accounting records and submit reports to the relevant authorities on time. In addition, the company is required to conduct an audit every year, attaching its data to the report. 

Peculiarities of bookkeeping of the company in Cyprus

The main peculiarity of accounting of Cyprus companies is filing the annual financial report together with the accounts of the previous year. In other words, if you are filing papers for 2021, they must be accompanied by documents for 2020. The company may not report on the year in which it was established, as well as the year of incorporation of the business, if a general meeting was held.

What to know when preparing the report

When filing your financial statements, you need to keep these things in mind:

• The accounting statements of a Cyprus company must be prepared in accordance with international law;
• All the financial operations should be written in accounting book which must be kept for 7 years;
• It is necessary to update accounting books not later than 4 months from the date of operation (once a quarter);
• Statement of account must be made no later than 30 days from the date of payment (unless there is an exception from the commissioner on the income statement);
• Statements prepared on the basis of the financial statement must be filed with the income tax authorities in Cyprus;
• A VAT return, based on the current transactions, has to be filed with the tax authorities once every quarter. It must be accompanied by supporting papers for each transaction;
• Since 2016 all firms registered in Cyprus must be audited (except for small businesses). The audit must take place annually after the preparation of the financial report.

Refusal or incomplete report is the reason for removal of the company from the register. It is possible to restore the rights within 2 years, but the reputation of the company will become doubtful.

What companies need to report

All Cyprus companies must regularly submit to the following institutions:

• Cyprus Tax Department: tax return and financial report, which includes the opinion of the independent auditor;
• Registrar's Office: Financial statements in Greek + annual report with a copy of the financial statements, including the auditor's report.

What should be in the financial report

• director's report;
• income statement;
• balance sheet with explanatory notes signed by two directors;
• consolidated statement of required state payments and notes thereto;
• auditor's verdict.

What should be in the annual accounts in Cyprus

• the number of shares in the company;
• credit obligations;
• information about shareholders, director, secretary, office address;
• data on the debts of the company.

Advantages

Keeping accounting records in Cyprus is mandatory, but the law does not require the presence of an accountant. Outsourcing is in demand here. To learn more, contact the specialists at IT OFFSHORE. This way you will save on wages and taxes.

The hired accountant will help not only to keep the accounts, but also to prepare papers on VAT, analyze the efficiency of the company, and give consultations. In order not to be late with the filing of documents, accountants and auditors must receive information about transactions on time.

Of the other advantages of accounting in Cyprus should be highlighted:

• Most issues are handled online.
• Any legal business can be registered in Cyprus.
• The interests of owners are protected not only by local but also by European laws.
• Preferential tax for different spheres of activity.