On 9 June 2022, the House of Representatives approved amendments to the Companies Law and to the Assessment and Collection of Taxes Law. The purpose of the amendments is to simplify the procedure of auditing the financial statements of SMEs.
Enterprises that satisfy the thresholds set out below will be allowed to submit their financial statements for a limited assurance review, as opposed to a full audit by a statutory auditor or audit firm as per the Auditors Law of 2017. The amendments were considered necessary to reduce the administrative burden and unnecessary costs on SMEs and audit firms alike.
The laws apply to the following persons:
- Companies whose net turnover and total balance sheet do not exceed EUR 200,000 and EUR 500,000, respectively, for at least two consecutive years. Τhe amendment enters into force on 1 January 2023 and its provisions apply to the financial statements of companies ending on or after 31 December 2022;
- Individuals whose turnover and any other income from sources defined in articles 5(1)(c), 5(1)(f) and 5(1)(g) of the Income Tax law (available in Greek only) exceed EUR 70,000 but do not exceed EUR 200,000, and whose total balance sheet does not exceed EUR 500,000 for at least two consecutive years; and
- Individuals whose turnover is less than EUR 70,000 are not obliged to prepare financial statements. Individuals whose turnover and total balance sheet exceed the above limits still are required to have their financial statements subjected to a full audit.
The above amendments do not apply to parent companies that are required to prepare consolidated financial statements and companies that are regulated and supervised by the Central Bank of Cyprus, the Cyprus Securities and Exchange Commission, or the Commissioner of Insurance, as well as companies which acquire or hold a qualifying participation in such companies.
