Audit in Cyprus

Audit in Cyprus: regulations and peculiarities

In accordance with regulations of local legislation, each company registered in the territory of the country is required to submit tax reports. In addition, audit is required. The auditor is appointed by the shareholders of the enterprise. Reports on finances and taxes are submitted to the Tax Department of Cyprus. The filing period is one year after the end of the tax year in the company.

Financial reporting in Cyprus

Annual submission of reporting implies the division of documentation into tax and general monetary documents. It requires to indicate financial obligations of the company, as well as number of shares and their status. Additionally, reporting on directors and managers of the company, shareholders and office should be submitted.

The financial statements in Cyprus include the following:

1. Full report on behalf of the director of the company.
2. Balance sheet of funds in the form of amounts of income and expenses.
3. Explanatory letter regarding the amounts in the balance sheet.
4. Conclusion of the audit.

It is possible to supplement the register with the other types of reporting, which indicate the flow of funds in the company. The financial report is part of the general tax reporting. In addition to the listed provisions, it is necessary to calculate and transfer the amount of tax, which the company plans to pay to the budget, to the authorized office of Cyprus.

The foregoing is the main peculiarity of the audit of Cypriot companies, namely: the enterprises themselves calculate the taxes on prospective profits. Do not underestimate your financial situation, because if the amount specified in the accounting statement is 25% less than the actual income, the company will be fined in the amount of 10% of the difference between the balance received. Similar interest rate is imposed on those that did not have time to file report.

Audit of company in Cyprus: specifics of tax accounting

After registering new company, the Cyprus Tax Department provides for the period of 18 months to file the first accounting report. Conditional division of companies is made for those which tend to receive economic income and those that do not conduct activities after the establishment due to any reasons.

Tax reporting in Cyprus is filed in any of the following cases:

1. In the absence of activities or tax planning, submission of declaration indicating the amount of profit equal to zero is required.
2. If receiving profit is doubtful, but possible, it is necessary to pay preliminary tax rate in the amount of 10% from the planned revenue.

If the accountant of the enterprise has incorrectly calculated the amount of payment to the Tax Department of Cyprus and significantly overestimated the amount of income, the company is entitled to receive compensation in the amount of 5.35% of the total amount of the already paid tax.

The reporting of the company in Cyprus shall be submitted before August 1, September 30 or December 31, depending on the date of establishment of the company. 18 months for filing documents is provided only for new enterprises. Further, annual submission of declarations without delays is required.

The audit should be carried out by licensed authority, and constant cooperation of the company and the auditor is the guarantee of a long and carefree operation of offshore or local company. The enterprise shall be fined for any violation in the form with audit report. The initial audit is carried out at the stage of registration of new company, and further it is carried out annually. Mandatory audit upon the liquidation of company in Cyprus also implies verification and submission of statements to public authorities.