CY IBE Operation

Accounting Records
It is a legal requirement that every company should keep books of account to record its transactions and enable the preparation of financial statements. At a minimum these books of account must show sales and purchases, moneys received and paid and the assets and liabilities of the company. The keeping of the books of account is done in accordance with internationally accepted accounting practices.

Annual Return
It is legal requirement that an annual return be filed by every company at least once a year with the Registrar of Companies containing certain required information such as on the amounts of shares and debentures, shareholders, directors, secretary, registered office, indebtedness of the company. The annual return is signed by a director and the secretary of the company.

Audit
The Companies Law requires that a statutory audit be performed for every company once a year. The audit is conducted in accordance with International Auditing Standards. The auditor of the company is appointed by its shareholder and is required to report to the shareholders on the fairness of the financial statements of the company and whether these comply with the requirements of the Companies Law.

Directors’ Report and Financial Statements
It is a legal requirement that every company should prepare yearly a directors’ report and financial statements comprising a profit and loss account, a balance sheet and supplementary notes. The Companies Law requires certain minimum information to be disclosed therein. The directors of the company are legally responsible for the preparation and the contents of the accounts.

Filing requirements of the Registrar of Companies
Every IBC is required to submit to the Registrar of Companies audited financial statements annually.

TAXATION ASPECTS

Filing Requirements
Corporation tax returns must be filed annually with the Income Tax Office for every fiscal year by every company. These are due by the end of the following year. Together with its returns company must also enclose copies of the company’s audited financial statements, auditors’ report, and tax computations.

Payment of Taxation
Companies are required to estimate their taxable income well in advance of the end of the fiscal year and submit a provisional assessment by 1 August of the same year. Based on this provisional assessment companies are required to pay their estimated tax in three equal installments. These installments are due on 1 August, 30 September and 31 December, respectively, and are on account of the final tax liability. Penalties will be levied for substantial understatement to tax on provisional assessments. The balance of the tax for a year of assessment together with a self-assessment form for the year is due on or before 1 August of the following year.

Penalties may apply for the late submission of the required documents to the Tax Authorities and interest charges apply for the late payment of taxes.