Accounting Services in Cyprus: What Every Company Needs (and Costs)

Every Cyprus private limited company — regardless of whether it is dormant, a holding company, or an active trading business — has mandatory accounting, audit, and tax compliance obligations under Cyprus law. Understanding these obligations is essential for any non-resident founder or investor operating a Cyprus company.

This guide covers the statutory requirements, costs, deadlines, and how to choose an accounting provider.

The Statutory Framework

Cyprus company accounting is governed by:

• Cyprus Companies Law (Cap. 113): Requires companies to keep proper accounting records and prepare annual financial statements
• Cyprus Income Tax Law: Requires annual corporation tax returns
• Cyprus VAT Law: Requires quarterly VAT returns for registered companies
• Cyprus Auditors and Statutory Audits Law: Requires statutory audit for most companies

All Cyprus companies must maintain their accounts in accordance with International Financial Reporting Standards (IFRS) or Cyprus-specific Generally Accepted Accounting Principles (GAAP) — the latter being simpler for small companies.

Required Services: An Overview

1. Bookkeeping

The foundation. All financial transactions must be recorded — bank receipts, invoices issued, invoices received, salary payments, expenses, intercompany transactions.

Frequency: Monthly or quarterly (depending on transaction volume). Output: Trial balance, general ledger, management accounts.

2. Annual Financial Statements

Prepared at year end (typically 31 December). Includes:

• Balance sheet
• Income statement (profit and loss account)
• Statement of changes in equity
• Cash flow statement
• Notes to the accounts

These must be prepared in accordance with IFRS or Cyprus GAAP.

Deadline: Financial statements should be prepared within 12 months of year end (i.e., by 31 December of the following year) to allow for audit and tax filing.

3. Statutory Audit

All Cyprus companies are required to have their financial statements audited by a registered Cyprus statutory auditor — unless they qualify for the small company audit exemption.

Audit exemption criteria: A company qualifies as “small” and may be exempt from audit if it meets at least two of these three criteria:

• Turnover ≤ €700,000
• Total assets ≤ €350,000
• Average employees ≤ 10

Most newly incorporated non-resident companies qualify for audit exemption, at least in their early years.

If audit is required:

• Auditor reviews accounting records, verifies balances, issues an audit opinion
• Timeline: typically 2–4 months after year-end accounts are finalised

4. Corporate Tax Return (IR4)

Filed annually with the Cyprus Tax Department. Reports the company’s taxable income, allowable deductions (including IP Box calculation if applicable), and resulting tax liability.

Deadlines:

• Provisional tax declaration (IR6): 31 July of the current year. Estimate of current year taxable income; provisional tax paid in two instalments (July 31 and December 31)
• Final tax return (IR4): Filed 15 months after year end (i.e., 31 March of the year after the next — e.g., for year ended 31 December 2024, final return by 31 March 2026)
• Final tax settlement: Any balance of tax due is settled on filing

Corporate tax return deadlines in detail →

5. VAT Returns

If the company is registered for Cyprus VAT, quarterly VAT returns are filed. Due by the 10th of the month following the quarter end.

VAT registration guide →

6. Annual Return to Registrar (HE32)

Not strictly an accounting service, but related to corporate compliance. The HE32 confirms current directors, shareholders, and registered office with the Registrar of Companies.

Deadline: 31 December each year. Prepared by: Company secretary, not accountant.

Costs: What You Pay for Accounting Services

Costs vary significantly based on company activity level. Here are representative ranges:

Detailed accounting packages and pricing →

Key Deadlines Summary

Missing these deadlines results in penalties — typically 5% surcharges on tax due, plus interest at 1.75%/month on outstanding balances. The HE32 late filing penalty is €50–€500.

VAT Registration

Cyprus VAT registration is required if the company’s taxable supplies exceed €15,600/year in Cyprus, or if the company makes intra-EU supplies. For international companies receiving services from outside Cyprus and licensing to non-Cyprus customers, VAT registration may not be immediately necessary.

VAT registration for non-resident companies →

Payroll and Social Insurance

If the company employs staff in Cyprus, additional obligations apply:

• Monthly payroll calculations
• Social insurance contributions (employer: 8.8%; employee: 8.8%)
• GESY (employer: 2.9%; employee: 2.65%)
• PAYE withholding (if employee salary exceeds €19,500/year)
• Monthly remittances to Social Insurance Department and Tax Department
• Annual IR63 (employee earnings certificate)

Payroll and social insurance guide →

Bookkeeping Requirements

Cyprus companies must maintain:

• Records of all income and expenditure
• Bank statements and reconciliations
• Invoices (issued and received)
• Payroll records (if applicable)
• Fixed asset register
• Intercompany loan agreements and accounting

Records must be retained for 6 years from the end of the accounting period to which they relate.

Bookkeeping requirements in detail →

Choosing an Accounting Provider

When selecting a Cyprus accounting firm, key considerations:

Qualifications: Look for ACCA (Association of Chartered Certified Accountants) or ICAEW-qualified accountants, or members of the Institute of Certified Public Accountants of Cyprus (ICPAC).

Audit registration: If your company may require an audit, the firm must be a registered statutory auditor with CySEC.

English communication: For non-Cypriot clients, seamless English communication is essential. Most Limassol-based firms serving international clients operate entirely in English.

Technology: Good firms use cloud-based accounting software (Xero, QuickBooks, Sage) that allows you visibility into your accounts without being physically present.

Specialisation: Some firms specialise in non-resident holding companies; others focus on operating businesses. Choose a firm with experience in your structure type.

Response time: For international founders, a responsive provider who answers WhatsApp and email quickly is often as important as technical expertise.

Related: VAT registration → · Annual audit requirements → · Payroll and social insurance → · Corporate tax deadline →