Given the increasing regulations and compliance/reporting requirements set by the Authorities in the last years, it is now even more important to ensure that your Cyprus Company is fulfilling its obligations deriving from the Laws and Regulations.
Given the increasing regulations and compliance/reporting requirements set by the Authorities in the last years, it is now even more important to ensure that your Cyprus Company is fulfilling its obligations deriving from the Laws and Regulations.
Therefore, it is important to ensure that all obligations are duly met on time, in order to avoid the above implications and to avoid disputes with the local and international authorities (e.g. Inland Revenue Department) with unnecessary financial and administration cost.
In accordance with the Companies Law in Cyprus (Cap.113), a Company is obliged to:
Companies are required by Company Law (Cap.113) to keep and maintain their Statutory Records at their Registered Office. These records include a Register of Directors, a Register of Secretaries, a Register of Shareholders, and a Register of Charges.
Furthermore, additional documents need to be maintained:
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Companies Law (Cap.113) requires the Board of Directors of a Company to hold General Meetings (AGM) in order to resolve important decisions in accordance with the Articles of Association of the Company. For example:
The Meetings should be held in accordance with legislation and must be duly convened with appropriate notice as set in the law.
The resolutions passed in these meetings should be documented in minutes by the Company’s Secretary and kept at the Company’s Registered Office.
Companies are obliged to inform the Registrar of Companies of any changes that will occur to their corporate structure, i.e. change of shareholders, directors, secretary, share capital, amendment of articles, or memorandum, etc.
Specific forms with required information duly completed, either by the secretary or the directors of the Company (sometimes to be accompanied with true copies of supportive resolutions for each action), should be submitted to the Registrar of Companies.
In accordance to the relevant legislation which is in force from the year 2011, all companies that are registered to the Registrar of Companies in Cyprus, have an obligation to pay a fee of 350 Euro on an annual basis (“Special/Annual Levy”).
The annual levy is compulsory for all registered companies in Cyprus. In prior years certain exceptions applied which were abolished through law amendments.
The levy must be paid by the 30th of June of every year. Thus, the annual levy for the year 2018, is due by 30 June 2018.
Penalties for late payment:
In case of a late payment of the special levy, the following levy increases are payable:
€385 if paid between 1 July and 31 August 2018
€490 if paid between 1 September 2018 and 30 November 2018
Removal from the Register
If the annual levy is not paid within the period of five months (i.e. from 30th June), then the Registrar will remove the company from the Register in accordance with the provisions of the Cyprus Company Law.
Removal from the Register will restrict the company from filling documents or requesting certificates from the Registrar.
A Company registered in Cyprus is required by the legislation, to submit to the Registrar of Companies, the Annual
Return (HE32 form) accompanied with the Audited Financial Statements, once a year, within 42 days of the date of the company’s annual general meeting, with the stipulation that this should never be later than 15 months after the date of the previous annual return. A company’s first annual return may be submitted up to 18 months from the date of its incorporation.
The submission is done once the Financial Statements:
The Annual Return contains the Company’s statutory information as at the date of the AGM and includes among other information: the Directors’ details, the Secretary’s details, the Registered Office, the Shareholders’ details, any Charges on the Company’s Assets.
Failure to submit the Annual Return within the time frames, will result in the deregistration of the company from the Register and the Registrar may impose further penalties and/or take legal actions against the directors (depending on the case) in accordance with the Companies Act Cap.113.
Non-compliance can result in substantial financial penalties/fines and/or offences/legal action.
Annual Tax Return
A company registered in Cyprus is required to complete and submit an annual Income Tax Return to the Inland
Revenue Department (IRD). The annual Tax Return for all Cyprus Companies (including small companies) must be based on financial statements which have been audited by auditors who must be licensed to act as auditors in
Cyprus.Temporary Tax Assessment
The temporary tax assessment form must be submitted on/or before 31st July of each year by all companies. The temporary tax is payable in two equal installments. The first installment of the temporary tax is due on the 31st of July and the second on 31st of December. A final payment must be made before 1st of August of the following year of assessment, so as to bring the total installment payments to the level of the actual liability due
Value Added Tax can be a very a complex area for a Company and it requires specific knowledge in order to be fully complied. It should also be noted that non-compliance and persistent late filing of VAT returns will directly result in a VAT audit from the VAT Authorities.
Registration – Companies that meet the criteria for VAT registration must register with the VAT Authorities within 30 days from the date at which the requirement to register exists.
Maintain Records – Proper records must be maintained as required by law for VAT investigations.
Reporting/ Submit VAT Returns – VAT returns must be submitted on a quarterly basis.
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Special Contribution for Defence is a tax imposed upon dividend income, ‘passive’ interest income and rental income. Different rules apply in the case of residents and non-residents.
Social insurance contributions and other contributions (e.g. cohesion fund, Redundancy Fund etc) are payable on salaries. These must be deducted and paid by the Company to the Tax Authorities.
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Author: Marinos D Marinou Tax Planning specialist at D Marinou & Co EST 1988 offering a range of corporate services including company incorporation, audit, vat and tax planning in Cyprus companies and international Clients.
Limassol: Filopappou 9, Limassol 3085, Cyprus
P.O. BOX 42656 P.C. 6043
Cyprus
Larnaca – Cyprus
Tel: +357 24663570
E-mail: admin@cyprusconsultancy.com