Originally published in July 2016. Updated November 2025 for accuracy and relevance.
Cyprus Company Taxation: Reporting and Audit Requirements Explained
Understanding Cyprus company taxation is essential for businesses operating in this strategic European jurisdiction. Cyprus offers a favorable tax environment, but full compliance with local laws is crucial. This guide provides a clear overview of the reporting requirements, audit obligations, and best practices for Cyprus-based companies.
Cyprus Corporate Tax Basics
Cyprus is known for its business-friendly tax regime. Key points include:
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Corporate Income Tax (CIT): 12.5%, one of the lowest rates in the EU.
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Applies to profits earned both within Cyprus and from foreign sources.
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Certain income streams, such as dividends from qualifying investments, may be exempt from CIT.
For more insights, see our Cyprus frequently asked questions page.
Reporting Obligations for Cyprus Companies
All Cyprus companies must adhere to strict reporting requirements to remain compliant. The main obligations include:
1. Annual Tax Return (Form IR4)
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Declares company income, expenses, and taxable profit.
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Filed annually, usually within 12 months after the accounting period ends.
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Example: For a year-end of 31 December, the deadline is 31 December of the following year.
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2. Audited Financial Statements
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Most Cyprus companies must have their financial statements audited.
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These statements are submitted alongside the annual tax return.
3. Provisional Tax Assessment
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Companies must estimate taxable income and pay provisional tax in two equal installments:
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1st installment: July 31
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2nd installment: December 31
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4. VAT Returns (if applicable)
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If registered for VAT, companies must submit monthly or quarterly VAT returns, depending on turnover.
5. Other Reports
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Depending on company activity, additional filings may include:
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Transfer pricing reports
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Withholding tax reports
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Other regulatory disclosures
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Audit Requirements in Cyprus
Under Companies Law, Cap. 113, all limited liability companies in Cyprus are generally required to undergo a statutory audit by a licensed auditor.
Audit Exemptions for Small Companies
A company may be exempt from the statutory audit if it meets at least two of the following three criteria:
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Turnover: Does not exceed €200,000
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Gross Assets: Does not exceed €500,000
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Average Employees: Does not exceed 10
Even if exempt, conducting an audit can provide added assurance to shareholders, investors, and lenders, and help improve internal controls.
Why Audits Matter
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Audits verify accuracy of financial statements
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Offer stakeholder confidence in company reporting
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Identify opportunities to improve internal processes and compliance
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Ensure long-term financial transparency and governance
Key Takeaways
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Cyprus offers a competitive 12.5% corporate tax rate
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Companies must submit annual tax returns and may pay provisional taxes
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Most companies require audited financial statements
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Small companies meeting exemption criteria may skip the audit, but it is recommended for transparency
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Professional advice from qualified accountants or auditors is crucial for compliance
Disclaimer
This guide is for general informational purposes only and does not constitute professional tax advice. Always consult a qualified Cyprus tax advisor or accountant before making decisions regarding company taxation or audits.
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If you wish to register a company in Cyprus our team will be happy to help you there and provide you with more detailed information, you can contact us at [email protected]
Cyprus Company Taxation