Recent corporate law amendments to Cyprus' Companies Law CAP 113 have been put in place to enhance corporate transparency and align with the EU Directive 2021/2101/EC. This significant change promotes public accessibility to tax practices of multinational enterprises, creating a framework for improved disclosure and accountability. But what do these changes mean for businesses operating in Cyprus?

Who Do the Corporate Law Amendments Apply to in Cyprus?
The latest amendments, coming into effect for financial years beginning after June 22, 2024, mainly target large-scale enterprises. Specifically, the amendment affects entities with annual consolidated or individual revenues exceeding €750 million over the last two consecutive years. This encompasses Cyprus-based ultimate parent entities, standalone companies, and medium to large subsidiaries of foreign parent entities, ensuring a wide reach of these new reporting requirements.
What are the Reporting Requirements?
Key financial data disclosures now become compulsory, with entities expected to release income tax information in a comprehensive, accessible format. Companies must report on several financial parameters for each jurisdiction of operation, including:
Revenue, including related party transactions
Profit or loss before income tax
Income tax paid and accrued
Accumulated earnings
Number of employees
Nature of activities undertaken
All reports should be submitted to the Cyprus Registrar of Companies no later than 12 months after the financial year ends. This ensures stakeholders receive timely and relevant data to scrutinise tax compliance.
What are the Responsibilities of Board Members?
The updated law places substantial responsibilities on the shoulders of corporate board members, mandating them to ensure compliance with the disclosure requirements. Their obligations include:
Ensuring report preparation and publication align with outlined provisions.
Filing reports promptly to avoid legal penalties.
Verifying data accuracy, reflecting the true financial state and complying with the legislation.
For subsidiaries operating in Cyprus under EU-based entities, similar responsibilities apply to foster coordination between boards and parent entities.
Are there Exemptions to These Rules?
While transparency is the focus, the law provides room for certain exemptions. Purely intra-EU operations may not necessitate report publication. Additionally, temporary exemptions can be obtained for safeguarding sensitive commercial data, provided the omissions are adequately justified.
However, any data withheld must eventually be disclosed within five years, ensuring complete and transparent reporting in the long term.
What’s Next for Businesses in Cyprus?
The primary goal behind these updates is to promote fiscal transparency and mitigate tax avoidance by large corporations. These amendments underscore Cyprus' dedication to EU transparency standards and global tax governance. For companies, it's an opportune moment to reassess their tax reporting strategies with an eye towards compliance, and businesses should stay proactive in adapting to these regulations.
If these changes impact your operations, navigating these complexities with expert guidance is crucial. At I.K. Kouppas & Co LLC, our understanding of EU regulations and specialised legal support can aid in this transition.
For further insight and support tailored to your needs, reach out to us at info@ikklaw.com.cy. Stay informed and ahead of regulatory changes—subscribe to our newsletter by visiting ikklaw.com.cy.
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