Preparation of Financial Statements – Tax Return

A. General

Annual financial statements must be prepared and filed with the Registrar of Companies showing the true and fair picture of the affairs of the company and explaining its transactions. Financial statements must be prepared in accordance with International Financial Reporting Standards (IFRS) and submitted in either Greek or English, which are the languages commonly accepted by the Cyprus Registrar of Companies and the tax authorities.

Also, based on the results of the financial statements, the annual tax returns must be prepared and filed with the income tax authorities.

Full disclosure of the operations/activities of the company for the year under consideration must be submitted to the accountants/auditors of the company in time, in order to meet the time limits for the preparation and filing of the relevant financial statements and tax returns.

B. Time limits as to financial statements – annual tax returns to be presented.

The first financial statements/annual tax returns must be presented, the latest, within 18 months from the registration of the company and thereafter once a year. The following rules as to time limits apply:-

1. If a company is registered before the 30th June, (inclusive) in a current year (first six months of the year) then the first period for which financial statements and tax returns need to be prepared is from the date of incorporation until the 31st of December of the current year.

Filing of these financial statements and tax returns with the Cyprus authorities has to take place by the 31st December of the following year. For example, a company registered on 01.05.2025 has to prepare financial statement and tax returns for the period 01.05.2025 until 31.12.2025 and file the tax return by 31.03.2027

2. Any company registered after 1st July in a current year then the first period for which financial statements/annual tax returns need to be prepared is from the date of its incorporation until the 31st of December of the following year. Filing of these financial statements/annual tax returns with the Cyprus authorities has to take place by the 31st December of the subsequent year. For example, a company registered on 1.8.2025 has to prepare financial statements and tax returns for the period 1.8.2025 until 31.12.2026 and file them by 31.03.2027

However, companies falling under category (2) above may elect to follow the provisions of the above time limits specified in category (1) above and file their first financial statements and annual tax return for the first year of their incorporation.

C. Criminal offences and liabilities

If the company does not comply with its legal obligation to prepared and file financial statements and annual returns in time, then this is a criminal offence and the company and the directors are liable to criminal prosecution accordingly.

D. Information and documentation to be provided annually to the accountants/auditors

In particular the following information and documentation must be disclosed every year for the preparation of the financial statements:

  • Bank statements and credit/debits notes for the financial year under consideration
  • All contracts signed
  • Invoices that have been issued by the company
  • Bills/invoices received by the company
  • Information and documentary evidence as to subsidiaries
  • Audited financial statements of subsidiaries
  • Dividends received from subsidiaries
  • Information and documentary evidence as to the operation and expenses, bank statements of branches and representative offices
  • Titles of property, movable or immovable purchased by the company
  • Any other document evidencing income or expense on behalf of the company
  • Documents proving payments of tax outside Cyprus to any tax authority for tax credit in Cyprus
  • Share Certificates for investments in subsidiaries or otherwise

E. Audited financial statements

The following companies must submit their financial statements to be audited by auditors duly authorized by the Cyprus Government:

  • Public companies
  • Any company which is obliged to prepare consolidated accounts
  • Any company which is not considered to be a small company

Small company is considered to be one which at least two of its following items do not exceed the following rules:

  1. total of assets presented in the balance sheet at 5,000,000 euros;
  2. net turnover of 10,000,000 euros;
  3. average number of employees, fifty persons;

Provided that the company which initially fulfils the above-mentioned conditions loses its accordance with the provisions in this section, shall be deemed not to have been published under subsection (4) of section 142.

It is important to note, that the Tax Department prefers that tax returns are audited and it has the right, under the provision of corporation tax law, not to accept tax returns that are not reviewed and approved by qualified auditors.

F. No – activity financial statements “Dormant accounts”

Even if the company had no operations for a particular year it is obliged to prepare and file financial statements/tax returns as specified above.

G. Registrar of Companies – Filing of financial statements

Annual General Meeting

The company must hold an Annual General Meeting each year. More than 15 months must not lapse between one Annual General Meeting and the following one.

The first Annual General Meeting may be held within a time limit of 18 months from the incorporation of the company. If a company holds its first Annual General Meeting within 18 months from its incorporation, then there is no need to hold this first Annual General Meeting during the year of its incorporation of the subsequent year.

Annual Return

Every company must prepare and file an Annual Return (Form HE32) with the Registrar of Companies once a year. The Annual Return must include, among other prescribed information, details of the company’s:

  • Registered office;
  • Share capital (where applicable);
  • Shareholders (members);
  • Directors;
  • Secretary; and
  • Registered charges, where applicable.

The Annual Return must be filed electronically with the Registrar of Companies within the statutory deadline applicable to the company’s annual return date and must be accompanied by the required financial statements and any other supporting documents, where applicable.

Financial Statements filed with Annual Returns

Companies are required to file their financial statements with the Registrar of Companies together with their Annual Return (Form HE32), in accordance with the provisions of the Companies Law.

The financial statements filed with the Registrar form part of the company’s public record and are available for public inspection, subject to applicable law.

Companies must comply with their statutory obligations to prepare and file annual financial statements and Annual Returns within the prescribed time limits. Failure to do so may result in penalties and may prevent the Registrar of Companies from accepting the Annual Return or issuing certain certificates relating to the company until the filing requirements have been satisfied.