Unanimous vote in House of Representatives
Small businesses relief was approved unanimously on Thursday by the House of Representatives, following the adoption of two legislative proposals aimed at easing the submission of financial statements by small-sized companies.
Amendments to Companies Law
The proposals, submitted by DISY MPs Kyriakos Hatzigiannis of Famagusta district and Nikos Sykas of Limassol district, amend the Companies Law.
The changes allow small companies and small company groups to prepare their financial statements based on Financial Reporting Standards specifically designed for small-sized entities.
Changes to audit review thresholds
The legislation also revises the net turnover threshold that companies must meet in order to submit their financial statements for review by a statutory auditor or audit firm. Under the amendments, the threshold is adjusted from €400,000 to €300,000.
In addition, specific Financial Reporting Standards that may be applied by these companies are formally defined.
Reducing administrative burden
During discussions at the House Commerce Committee, it was stressed that the proposed regulations are necessary to ease the disproportionate administrative burden faced by small companies. Members noted that these businesses are currently required to comply with International Financial Reporting Standards, which often impose complex and costly obligations.
It was underlined that small companies operate with limited resources, making full compliance with high regulatory requirements particularly demanding and expensive. In some cases, strict adherence to such standards was described as disproportionate or unnecessary.
Role of professional bodies and Finance Ministry
Under the new framework, the Institute of Certified Public Accountants of Cyprus (ICPAC) is designated as the competent authority responsible for determining the applicable Financial Reporting Standards. The Minister of Finance will be responsible, among other duties, for approving the standards submitted for consideration.
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