You signed the incorporation papers. You appointed the directors. Somewhere along the way, someone mentioned auditors in Limassol and you nodded and moved on. Now the year has ended, deadlines are appearing, and the question is no longer abstract: what exactly are you required to do, when, and what happens if you get it wrong? The 2026 tax reform has changed the answer to that last question more than most directors realise. This guide gives you the full picture, without the technical fog.
What to Know at a Glance
| # | Topic | Key Point |
| 1 | Who needs a statutory audit | Almost every Cyprus company. There is no general size exemption. |
| 2 | Review engagement threshold | Turnover below €300,000 AND assets below €500,000 for two consecutive years (updated threshold from 6 Feb 2026). |
| 3 | HE32 annual return deadline | Within 28 days of the Annual General Meeting. Must be accompanied by audited financial statements. |
| 4 | TD4 corporate tax deadline | For the 2026 tax year onwards: 31 January of the second year following year-end. Two months earlier than before. |
| 5 | Penalties for late filing | €50 + €1/day (capped at €150) for late HE32. €100 fixed penalty for late TD4, plus interest. Worst case: director liability and company strike-off. |
| 6 | When to instruct your auditors | Now, if your December 2025 year-end accounts are not yet complete. The new TD4 rule means the 2026 audit cycle starts earlier. |
Does Your Cyprus Company Need a Statutory Audit?
The short answer is almost certainly yes. Under the Cyprus Companies Law (Cap. 113), every private limited company registered in Cyprus is required to have its annual financial statements audited by a licensed statutory auditor or statutory audit firm. This applies regardless of the size of the company, its level of activity, or whether it traded during the year.
Audits are conducted under International Standards on Auditing (ISAs). Financial statements must be prepared under IFRS as adopted by the EU. Both requirements are non-negotiable for the vast majority of Cyprus companies. The same filing obligations apply whether you undergo a full audit or the limited review engagement described below.
There is no general small company exemption in Cyprus law based on turnover or headcount alone. This is one of the most common misconceptions among directors of newly formed holding companies or dormant entities. If your company is registered in Cyprus, assume it needs an audit unless a licensed auditor confirms otherwise in writing.
When Can a Review Engagement Replace a Statutory Audit?
A limited exception exists for very small entities. A Cyprus company may replace its statutory audit with a review engagement – a lighter process conducted under ISRE 2400 (Revised) – if it meets both of the following criteria for two consecutive financial years:
| Criterion | Previous Threshold | Updated Threshold (from 6 Feb 2026) |
| Annual net turnover | Below €200,000 | Below €300,000 |
| Total gross assets | Below €500,000 | Below €500,000 (unchanged) |
The updated turnover threshold applies to financial years beginning on or after 6 February 2026. Both criteria must be met. Both must have been met for the two preceding consecutive years. Meeting one is not enough.
In practice, this exemption is rarely available to subsidiaries of international groups. Most group entities hold intercompany balances, loans, or investment assets that push total gross assets above €500,000. If your Cyprus entity is part of a wider group structure, assume a full statutory audit is required.
A review engagement still requires a licensed statutory auditor or audit firm. It still produces a set of reviewed financial statements that must be filed with the Registrar of Companies and referenced in the corporate tax return. It is a lighter process, but it is not an absence of process.
Cyprus Audit Filing Deadlines: What Has Changed in 2026
This is where directors need to pay close attention. The 2026 tax reform introduced a permanent change to the TD4 corporate tax return deadline that has direct implications for when your audit needs to be complete.
| Obligation | Deadline | Authority | Penalty (Late) |
| Annual Return (HE32) with audited financial statements | Within 28 days of the AGM | Registrar of Companies | €50 + €1/day, capped at €150 |
| Annual Levy | 30 June each year | Registrar of Companies | 10% surcharge (2 months), then 30%. Non-payment risks strike-off. |
| TD4 Corporate Tax Return (2025 tax year and earlier) | 31 March of the second year following year-end | Tax Department (TAXISnet) | €100 fixed + interest on unpaid tax |
| TD4 Corporate Tax Return (2026 tax year onwards — NEW) | 31 January of the second year following year-end | Tax Department (TAXISnet) | Increased penalties under 2026 reform |
| Provisional tax — 1st instalment | 31 July | Tax Department | Interest and surcharges |
| Provisional tax — 2nd instalment + SDC where applicable | 31 December | Tax Department | Interest and surcharges |
The critical change for December year-end companies:
| For the 2026 financial year (year ending 31 December 2026), the TD4 corporate tax return is due 31 January 2028, not 31 March 2028 as it would have been under the old rules.This means the audit must be substantially complete by the end of 2027 at the latest. In practice, to allow time for tax computation preparation and submission, your auditors need complete and organised financial information well before that. The most common cause of audit delays is not complexity. It is client information arriving in fragments. The earlier you instruct your auditors and prepare your books, the less pressure the whole compliance cycle carries. |
Note: For the 2023 tax year, the TD4 deadline has been extended to 31 March 2026. For the 2024 tax year, to 30 November 2026. These are transitional extensions. The permanent new rule applies from the 2026 tax year onwards. All TD4 submissions are made via the Tax Department’s TAXISnet portal.
How to Choose Auditors in Limassol and Cyprus
With audit timelines tightening under the 2026 reform, the choice of auditor matters more than it used to. A firm that is slow to begin, hard to reach, or under-resourced during peak season creates a compliance risk that extends well beyond the audit itself – delayed audits cascade into late annual returns, late tax filings, penalties, and interest.
When choosing auditors in Limassol or elsewhere in Cyprus, the practical questions to ask are:
- Are they ICPAC-licensed? This is a legal requirement. Only licensed statutory auditors or audit firms registered with the Institute of Certified Public Accountants of Cyprus (ICPAC) can issue an audit opinion or conduct a review engagement.
- Do they also handle tax compliance? When the same firm manages both the audit and the TD4 submission, the chain between audited accounts and filed tax return is tighter and faster.
- What is their process for client information? Firms with a clear, structured onboarding and document request process typically complete audits faster than those that wait for whatever arrives.
- Do they understand your corporate structure? International holding companies, group entities with transfer pricing obligations, and companies with related-party transactions need auditors who understand Cyprus’s compliance requirements at that level.
At Iacovou & Co, our Audit & Assurance team works with Cyprus companies of all structures: from straightforward private limited companies to international group subsidiaries with transfer pricing documentation requirements. We are ICPAC-licensed chartered accountants in Limassol with over 20 years of audit experience on the island.
We also offer integrated accounting services and tax compliance so your audited accounts feed directly into your tax return, without the handover delays that come with using separate firms.
Common Mistakes Cyprus Directors Make Around the Audit
The issues that create compliance problems are almost always the same ones. They are not complicated. They are just overlooked.
- Assuming a small or dormant company is exempt. There is no general size exemption. A company with minimal activity still needs an audit or a qualifying review engagement conducted by a licensed auditor.
- Starting the audit process too late. The TD4 now comes earlier. The audit must come earlier. If your December 2025 accounts are not yet with your auditor, that process should start immediately.
- Treating the HE32 as a standalone filing. The annual return cannot be filed without the audited financial statements. If the audit is delayed, the HE32 is delayed. Both attract penalties.
- Overlooking the annual levy. The €350 annual levy is due 30 June regardless of audit status. A 30% surcharge applies for late payment, and continued non-payment risks company strike-off.
- Not reviewing the review engagement threshold. Companies that previously exceeded the thresholds should check whether the updated €300,000 turnover threshold now makes them eligible for a lighter-touch review.
- Missing the Summary Information Table (SIT) obligation. Any Cyprus company with controlled transactions must submit a SIT alongside the TD4, regardless of the value of those transactions. There is no minimum threshold for this obligation.
Frequently Asked Questions
Does every Cyprus company need a statutory audit?
In almost every case, yes. Under the Companies Law Cap. 113, all Cyprus private limited companies are required to have their financial statements audited annually by a licensed statutory auditor. The only exception is a very small company that meets both the turnover and total assets thresholds for two consecutive years, allowing it to opt for a limited review engagement instead.
What is the difference between a statutory audit and a review engagement in Cyprus?
A statutory audit provides reasonable assurance through detailed testing and evidence-gathering under International Standards on Auditing (ISAs). A review engagement provides limited assurance through inquiry and analytical procedures under ISRE 2400 (Revised). Both must be conducted by a licensed statutory auditor or audit firm. Filing obligations with the Registrar of Companies and the Tax Department are identical either way.
What are the audit exemption thresholds in Cyprus for 2026?
For financial years beginning on or after 6 February 2026, a company may qualify for a review engagement instead of a statutory audit if its annual net turnover is below €300,000 (updated from €200,000) and its total gross assets are below €500,000. Both conditions must be met for two consecutive financial years.
When is the HE32 annual return due for a Cyprus company?
The Annual Return (Form HE32) must be filed with the Registrar of Companies within 28 days of the Annual General Meeting (AGM). It must be accompanied by the audited or reviewed financial statements. Late filing attracts a penalty of €50 plus €1 per day, capped at €150.
What is the TD4 deadline for the 2026 tax year?
For financial years ending 31 December 2026 and beyond, the TD4 corporate tax return deadline is permanently moved to 31 January of the second year following the tax year – two months earlier than the previous 31 March deadline. For a December 2026 year-end, the TD4 is due 31 January 2028. The audit must be complete before the TD4 can be prepared and submitted.
What happens if a Cyprus company misses the audit filing deadlines?
Late filing of the HE32 triggers a penalty of €50 plus €1 per day, capped at €150. A late TD4 incurs a €100 fixed penalty plus interest on any unpaid tax. The annual levy also carries escalating surcharges. In persistent cases, companies risk being struck off the Registrar. Directors may also face personal liability for the non-compliance.
How do I choose auditors in Limassol?
Look for an ICPAC-licensed firm with experience in your company’s structure – whether that is a straightforward private limited company, a holding entity, or a subsidiary within an international group. A firm that handles both the audit and tax compliance will reduce the risk of handover delays between the two processes. The earlier you instruct your auditors, the more time exists to manage the compliance cycle without penalty.
Does my Cyprus company need an audit if it made no profit this year?
Yes. The statutory audit obligation under Cap. 113 is not triggered by profitability – it is triggered by being a registered Cyprus company. A loss-making company, a break-even company, and a company that did not trade at all are all subject to the same audit requirement. The only route to avoiding a full statutory audit is meeting the review engagement thresholds on turnover and total assets for two consecutive years – and even then, a licensed auditor must still be engaged.
Do I need an audit for a dormant Cyprus company?
In most cases, yes. A dormant company is still a registered legal entity under Cyprus law and is subject to the same statutory audit requirements as an active one. The exception is if the company meets the review engagement criteria – turnover below €300,000 and total assets below €500,000 for two consecutive years – in which case a lighter review engagement may apply. If the company has been completely dormant with no transactions and minimal assets, your auditor can advise on the most efficient approach, but the obligation to engage a licensed auditor does not disappear simply because the company is inactive.
Can my accountant also be my auditor in Cyprus?
Not necessarily – and the distinction matters. In Cyprus, only an auditor or audit firm licensed by ICPAC is permitted to conduct a statutory audit or sign an audit opinion. A general accountant who handles your bookkeeping or management accounts is not automatically licensed to conduct your statutory audit. Some firms hold both accounting and audit licences, which is why using an integrated firm – one that handles both functions under one roof – simplifies the process and removes any ambiguity about who is responsible for what.
Work With Auditors in Limassol Who Handle the Whole Picture
Most compliance problems do not start with the audit. They start three months before it, when nobody has organised the books, nobody has confirmed the deadlines, and the auditor is still waiting on documents that should have arrived in January. By the time that unravels, the HE32 is late, the TD4 is at risk, and the penalties are already running.
Iacovou & Co are chartered accountants in Limassol with over 20 years of experience. We are ICPAC-licensed auditors and we handle the full compliance cycle: audit, annual return, and tax return, coordinated under one roof so nothing slips between them. For Cyprus companies, international holding structures, and foreign-owned entities, that joined-up approach is the difference between a smooth year-end and an expensive one.
If your December 2025 accounts are not yet with your auditor, do not wait. Contact us today. We will confirm what your company needs, set out the timeline, and make sure the 2026 compliance cycle does not catch you short.
Iacovou & Co | Chartered Certified Accountants & Auditors, Limassol, Cyprus | Last reviewed: June 2026