Cyprus Accounting & Audit Requirements 2026: Deadlines, Obligations & Penalties

Accounting Standards: IFRS Is Mandatory

Cyprus is unusual among EU member states in that it requires all companies — including small private limited companies — to prepare their annual accounts in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. This requirement is embedded in the Cyprus Companies Law, Cap. 113, as amended.

There is no option in Cyprus to use national or local GAAP in place of IFRS. Many EU countries allow smaller companies to use simplified national accounting standards, but Cyprus does not offer this option. IFRS for SMEs, the simplified IFRS framework designed for entities without public accountability, is also not available in Cyprus — full IFRS is required.

The consequence is that even a Cyprus company with modest turnover and simple transactions must comply with the full suite of IFRS standards where relevant. For a trading company, this will typically involve: IFRS 15 (revenue recognition), IFRS 16 (leases), IAS 36 (impairment), IAS 37 (provisions), and IAS 12 (income taxes), among others.

A complete set of IFRS-compliant financial statements for a Cyprus company must include: a statement of financial position (balance sheet) as at the year-end date; a statement of comprehensive income (profit and loss account and other comprehensive income); a statement of changes in equity; a statement of cash flows; and notes to the financial statements, including a description of significant accounting policies.

Financial statements are typically prepared in English, which is the dominant language of international business in Cyprus. They may also be prepared in Greek (the official language). Where the primary operating language of the business is another language (e.g., Russian, Chinese), the financial statements must still be in English or Greek for filing purposes.

The financial year-end for Cyprus companies can be any date chosen by the directors, though 31 December is by far the most common. Companies with non-December year-ends must adjust all filing deadlines accordingly.

The Audit Requirement: No Exemptions

Cyprus does have a size-based exemption — but it is much more restrictive than the UK or Ireland small-company exemptions. Most Cyprus companies still require a full statutory audit. The carve-out, formally available since 2022 and broadened from 6 February 2026, allows small private limited companies meeting all of the following criteria to opt for a **Review Engagement** under International Standard on Review Engagements (ISRE) 2400 (Revised) instead of a full audit:

**Eligibility for the Review Engagement alternative:** (a) net turnover below €200,000 (rising to €300,000 from 6 February 2026); (b) total gross assets below €500,000; (c) thresholds met for two consecutive financial years; (d) the company is a private limited liability company; (e) NOT a public limited company, public-interest entity, regulated financial institution (CBC / Insurance Superintendent / CySEC), or required to prepare consolidated financial statements.

A review engagement provides limited assurance — primarily through inquiry and analytical procedures rather than the detailed substantive testing of a full audit. It must still be conducted by a licensed Cyprus statutory auditor or audit firm registered with ICPAC. Typical fee differential: review engagements range €600–€1,200 vs €1,200–€3,500+ for a full audit on a comparable small company. Eligible companies considering the choice should weigh cost savings against the lower assurance level — banks, suppliers and procurement counterparties may continue to require full audits even where statutory rules permit a review engagement.

Companies that do not qualify (i.e., turnover ≥ €300,000, assets ≥ €500,000, public/regulated entities, or those preparing consolidated accounts) must continue to have a full statutory audit by an ICPAC-registered auditor. There is no audit exemption based on dormancy alone — even a non-trading company that exceeds the asset threshold must be audited.

The audit requirements must be fulfilled by a licensed statutory auditor. In Cyprus, statutory auditors must be registered with and licenced by ICPAC, the professional body that regulates the audit profession under the Auditors Law 53(I)/2017. ICPAC maintains a public register of licenced firms and individual auditors.

Auditor independence is a fundamental requirement. A Cyprus audit firm that prepares the accounting records, bookkeeping, or financial statements for a company cannot also be that company's statutory auditor — this would be a prohibited non-audit service that impairs independence. In practice, many Cyprus SMEs use one firm for bookkeeping and accounts preparation and a separate firm for the audit.

The auditor's report must comply with International Standards on Auditing (ISAs) and express an opinion on whether the financial statements give a true and fair view of the company's financial position and financial performance in accordance with IFRS. The audit opinion appears in the financial statements filed with the Registrar and is publicly accessible.

Dormant companies — those that had no significant accounting transactions during the year — technically still require an audit. In practice, the audit of a dormant company with nil activity and no assets or liabilities is relatively straightforward and inexpensive, but it cannot be omitted. Directors should obtain guidance from their Cyprus accountant if the company has been dormant.

For Cyprus companies whose shares are listed on US stock exchanges or whose parent is subject to US SEC reporting requirements, additional requirements may apply under PCAOB (Public Company Accounting Oversight Board) standards. This is a specialist area and beyond the scope of most private Cyprus companies.

Filing Deadlines — Full Calendar

Cyprus companies face multiple filing deadlines spread throughout the year, imposed by different authorities (the Registrar of Companies and the Tax Department). Missing any of these deadlines can result in financial penalties, late filing surcharges, and reputational issues.

The following table summarises all material deadlines for a Cyprus company with a 31 December year-end (the most common). Companies with other year-ends should adjust the months accordingly.

These deadlines assume a 31 December year-end. **2026 reform — IR4 deadline change**: from FY2026 onwards the IR4 corporate tax return is due 31 January of the SECOND year following the tax year (FY2026 returns due 31 January 2028). For tax years before the reform, transitional deadlines apply: FY2023 returns 31 March 2026; FY2024 returns 30 November 2026; FY2025 returns retain the legacy 31 March timing. Cite the Cyprus Tax Department TAXISnet portal for the current applicable deadline by tax year.

What Must Be Filed with the Registrar

The Cyprus Registrar of Companies (DRCOR) maintains a public register of all Cyprus-registered companies. The annual return and financial statements filed with the Registrar are publicly accessible via the e-filing portal at efiling.drcor.mcit.gov.cy.

The Annual Return (form HE32) must be filed within 28 days of the company's Annual General Meeting (AGM). The HE32 contains: current list of shareholders and their shareholdings; current directors and their details; registered office address; share capital structure (authorised and issued); and any charges over company assets registered at the Registrar. Note: the €350 annual company levy was abolished with effect from 2024 — no annual Registrar levy is payable on Cyprus companies.

The audited financial statements must accompany or follow the HE32 filing. They are filed using the DRCOR e-filing system and become part of the public record. This means any member of the public — including competitors, suppliers, customers, or journalists — can access the company's balance sheet, profit and loss account, and notes to the accounts.

This public disclosure obligation has planning implications. Some Cyprus company directors prefer to keep financial information as concise as possible within IFRS requirements, or to use holding structures where the operating company is a subsidiary rather than the top-level entity. Unlike the UK, Cyprus does not permit abbreviated or filleted accounts for small companies — full IFRS accounts must be filed.

There is no concept of a 'micro-entity' regime or a 'small companies' regime in Cyprus. Every company, regardless of size, files the same full financial statements.

Corporate Tax Return (IR4): What Is Required

The Cyprus annual return HE32 is filed at the Registrar of Companies; the corporate income tax return (form IR4) is filed electronically via the TaxisNet portal at the Cyprus Tax Department. From the 2026 tax reform, the IR4 deadline is 31 January of the SECOND year following the tax year — first applying to FY2026 returns due 31 January 2028. Transitional rules apply for FY2023 (deadline 31 March 2026), FY2024 (30 November 2026), and FY2025 (legacy 31 March timing). The HE32 annual return continues to follow its own separate AGM-based timing.

The IR4 incorporates the company's profit and loss account as the starting point, then applies tax adjustments to arrive at the taxable profit. The main adjustments include: add-back of depreciation (replaced by capital allowances at statutory rates); add-back of disallowable expenses (fines, personal expenses, non-business expenditure); deduction of exempt income (qualifying dividends, qualifying gains); IP Box deduction (80% of qualifying IP profits); Notional Interest Deduction (NID) on new equity; R&D super-deduction (120% of qualifying R&D expenditure, extended to 2030); and loss relief.

Where the company has related-party transactions that cross the transfer pricing Local File thresholds (€10 million for financial transactions, €5 million for goods, €2.5 million for other transactions), a Summary Information Table (SIT) must accompany the IR4 filing. The Local File documentation itself is not filed but must be prepared and retained, available for review on request.

The IR4 also includes: the participation exemption calculation for inbound dividends; the IP Box calculation and supporting schedule; the NID calculation; and a declaration by the director or authorised signatory as to the accuracy of the return.

Penalties for late IR4 filing: a 5% surcharge is applied to any tax that was due but unpaid at the time of filing. In addition, an 8% per annum interest charge accrues on outstanding tax from the due date. If no tax is due (because the company has losses, or because all provisional tax has been correctly paid), there is no financial penalty for a late IR4 — but a late filing notice will be issued and persistent late filing may trigger a tax audit.

The Cyprus Tax Department has significantly expanded its electronic verification capabilities. IR4 data is cross-referenced against VAT returns, payroll returns (IR7), and bank data obtained through the Common Reporting Standard (CRS). Discrepancies trigger automated risk scoring and may lead to enquiry letters or formal audits.

Record Keeping: 6 Years

Cyprus law requires companies to retain all financial statements and accounting records for a minimum of 6 years from the end of the accounting period to which they relate. This obligation applies to all companies regardless of size, trading status, or whether they have been audited. Our accounting services include full record management and retention.

The categories of documents that must be retained include: sales invoices and purchase invoices; receipts for all payments and expenses; bank statements and bank reconciliations; payroll records and payslips; contracts and agreements with customers, suppliers, and service providers; board minutes and shareholder resolutions; expense claims and supporting receipts; and correspondence with tax authorities.

Digital record keeping is fully acceptable in Cyprus. Documents may be stored in electronic format (scanned PDFs, digital accounting software exports, cloud-based accounting systems) provided that: the original quality and legibility is maintained; records can be printed on request; and the storage system is backed up and secure.

Separate retention obligations apply to AML-regulated records. Under Cyprus anti-money laundering law, customer due diligence (KYC) records, transaction monitoring records, and beneficial ownership records must be retained for 5 years from the end of the business relationship (or from the date of the last transaction if no ongoing relationship).

Tax records should be retained for longer than the standard 6 years if: the company is or may be under a tax investigation; there is an open assessment or appeal; the company has claimed loss carry-forwards (which may be relevant for up to 7 years post-reform); or the company has significant asset values that could be relevant to future CGT calculations.

Failure to produce records when requested by the Cyprus Tax Department can result in fines of up to €5,000 and may expose the company to estimated tax assessments based on available information.

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Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Tax laws change frequently. Consult a qualified Cyprus adviser for guidance specific to your situation. The information on this page is general guidance only and does not constitute legal, tax, accounting, immigration or financial advice. Specific advice should be obtained based on the facts of each case.