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Statutory Reporting and Tax Obligations of Cyprus Companies: What You Need to Know

Statutory Reporting and Tax Obligations of Cyprus Companies: What You Need to Know

Cyprus offers a favourable and competitive business environment that attracts investors from all over the world. With its strategic location, highly skilled workforce, and efficient business setup procedures, Cyprus is an ideal hub for international business operations. Whether you are looking to establish a new business or expand your existing one in Cyprus, it is important to understand the statutory reporting and tax obligations that come with running a company on the island.

Statutory Reporting Obligations

Companies operating in Cyprus must comply with a set of statutory reporting requirements that are set out in the Cyprus Companies Law. These requirements include:

1. Annual financial statements: All companies must prepare and submit annual financial statements that show the financial position and performance of the company. These financial statements should be audited by a registered auditor in Cyprus and must be submitted to the Registrar of Companies within 13 months from the end of the financial year.

2. Annual return: All companies must submit an annual return to the Registrar of Companies within 28 days from the date of the company’s Annual General Meeting. The annual return contains important information about the company, such as its directors, shareholders, and registered office.

3. Other filings: Companies must also notify the Registrar of Companies of any changes to the company’s details, such as changes to its registered office, directors, or share capital.

Tax Obligations

Cyprus has a well-established and competitive tax system that attracts many international businesses. The main tax obligations that companies operating in Cyprus must comply with are:

1. Corporate income tax: Companies registered in Cyprus are subject to corporate income tax on their worldwide income. The corporate income tax rate in Cyprus is currently set at 12.5%, which is one of the lowest rates in the European Union.

2. Value Added Tax (VAT): Companies that are registered for VAT must charge their customers VAT on their goods and services. The current standard VAT rate in Cyprus is 19%.

3. Payroll taxes: Employers in Cyprus must deduct and pay payroll taxes on behalf of their employees. These payroll taxes include social insurance contributions and income tax.

4. Other taxes: Companies in Cyprus may also be subject to other taxes, such as stamp duty, property tax, and capital gains tax.

Compliance is Key

Compliance with statutory reporting and tax obligations is key to avoiding penalties and ensuring the smooth running of your business in Cyprus. Failure to comply with these obligations can result in fines, penalties, and other legal consequences. As such, it is important to engage a professional service provider who can assist you with your company’s compliance obligations, such as an experienced accountant or tax advisor.

Final Thoughts

Cyprus offers a unique and competitive business environment that is well-suited to international companies. However, complying with the statutory reporting and tax obligations of doing business in Cyprus is crucial to avoiding legal and financial problems. By engaging professional advisors and staying on top of your requirements, you can ensure the ongoing success of your business in Cyprus. 

The above article is provided only for information purposes. It should not be consider as a professional advice. We recommend you to ask for a professional advice before acting on any information provided.  Should you require a professional advice please contact us at info@elaaccounting.com or call us at (+357 99 832578).

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