Cyprus Year-End Checklist — Books, Audit, Every Filing

The year-end for a Cyprus limited company is two jobs in sequence. First you close the books: every bank account reconciled, every missing receipt chased, depreciation, accruals, prepayments and intercompany balances posted. Then you run the compliance cycle that depends on those books: the second provisional tax instalment on 31 December, the financial statements, the audit or review engagement, the AGM, the HE32 annual return to the Registrar and the corporate income tax return to the Tax Department. One of those dates cannot be repaired afterwards, which is why we plan the close across the whole final quarter.

What does closing the year involve?

Closing the year means producing a ledger that fairly reflects the financial year, then handing that ledger, in order, to everyone who relies on it: the auditor who signs the accounts, the shareholders who receive them at the AGM, the Registrar who gets them attached to the HE32, and the Tax Department that gets the corporate return computed from them.

The sequence is why the bookkeeping matters more than it looks. One unreconciled bank account or a supplier invoice posted in the wrong year flows through the provisional tax estimate, the tax computation and every filing downstream. The law also expects the ledger to be current well before December: accounting records must be updated no later than the end of the fourth month after the month of the transaction, so a year of untouched books is already a breach before the close even starts.

What should you reconcile before locking the books?

Everything that can be checked against something external. This is the order we run it in, because each item makes the next one easier.

Reconcile every bank account to the last day of the year
Every current account, savings account, card and payment platform, in every currency, should agree to the closing statement with no unexplained items. The classic finds are a customer who paid twice, a subscription charged to a personal card, and a transfer between your own accounts posted as income.
Chase missing receipts and invoices
List the bank movements with no document behind them and close the list down. A cost without a receipt is a cost the auditor will question and the tax computation may not deduct. A sale without an invoice is a VAT and revenue problem. Chase counterparties now, before their own year-end makes them slow.
Update the fixed-asset register and post depreciation
Add every asset bought during the year, remove anything sold or scrapped, and post the year's depreciation. Accounting depreciation and the capital allowances the Tax Department accepts are two different calculations, and the allowance rates depend on the asset class.
Post accruals and prepayments
Costs that belong to this year but will be invoiced next year, such as the auditor's fee, December utilities and earned bonuses, are accrued. Costs paid this year that belong to next year, such as annual insurance and software licences, move to prepayments. Revenue invoiced ahead of delivery follows the same logic in reverse.
Agree intercompany and director balances
Balances with group companies and with the directors themselves should agree on both sides to the cent, with paperwork showing what they are. A director's loan account that has drifted into a receivable from the director raises its own tax questions, so surface it now rather than at the audit.
Tie the VAT and payroll control accounts
The VAT balance in the ledger should tie to the last return filed plus the current period. The payroll, Social Insurance and GeSY control accounts should tie to what was declared and paid. Differences here are almost always a misposted payment, and they are cheap to fix before the auditor finds them.
Lock the year
Once the adjustments are in, close the period so nothing moves while the financial statements are drafted. Any later correction goes through a dated adjusting entry, never through editing a posted transaction.

The state of the ledger is most of what the audit costs. An auditor quotes on the work in front of them, and a year of unreconciled accounts means reconstruction at the auditor's hourly rates instead of a straightforward review of clean books.

Can you still revise the provisional tax estimate?

Yes, up or down, until 31 December. A company files its provisional tax estimate by 31 July of the tax year and pays two equal instalments on 31 July and 31 December, with the estimate revisable any time before 31 December. From tax year 2026, a company incorporated or starting income after 30 June instead files by 31 December and pays a single instalment on that date.

The rule that gives the deadline teeth is the underestimation surcharge: if the declared estimate proves to be below 75% of the final taxable result, an additional 10% of the difference between the final tax and the provisional tax paid is due. File no estimate at all and provisional income is deemed nil, so the 10% applies to the entire final tax.

Say the summer estimate was €40,000 of taxable profit and the year is closing nearer €80,000. At the 15% rate the final tax is €12,000 and the instalments cover €6,000. Because €40,000 is under 75% of €80,000, the surcharge adds 10% of the €6,000 shortfall, so €600 that a five-minute revision in December would have avoided. A company running behind its estimate revises downwards instead and stops prepaying tax it will not owe. The mechanics of the estimate and how the instalments credit against the final liability are in provisional tax in Cyprus.

How do the financial statements, the audit and the AGM fit together?

The financial statements are the product of the closed books, the audit or review is independent sign-off on them, and the AGM is where the shareholders receive them. Cyprus allows no size-based escape from the sign-off: every company prepares IFRS financial statements and submits them for audit by statutory auditors licensed under the Auditors Law.

The relief for the smallest companies is a review engagement rather than a full audit. A private company qualifies when net turnover does not exceed €300,000 and gross assets do not exceed €500,000, both met for two consecutive financial years, the turnover limit having been raised from €200,000 with effect from 6 February 2026. Net turnover here includes rental income, interest, dividends and royalties, so a small trading company with investment income can cross the line sooner than its revenue suggests. A review is a lighter procedure performed by the same class of licensed auditor, and every filing that follows is identical. Cyprus audit requirements covers who qualifies and what the auditor will ask for.

Once signed, the statements are laid before the shareholders at the AGM, and the same set is what the Registrar receives with the annual return. That chain is the practical reason the accounts cannot drift: a late audit makes every downstream filing late with it.

What goes to the Registrar at year-end: the HE32

The HE32 annual return is owed to the Registrar of Companies, separately from anything you owe the Tax Department. It is made up to a date specific to your company and filed within 28 days of that made-up date, once per calendar year, with the first return drafted the day after 18 months from incorporation expire. The filing fee is €20, and the return must be accompanied by the previous financial year's financial statements, certified by a director and the company secretary.

Filing late costs a one-off €50 plus €1 per day, capped at €150 per return, plus a €20 overdue-filing fee on top of the normal one. The penalty itself is small, but persistent non-filing exposes the company and its officers to prosecution and, eventually, strike-off. Since the made-up date is your company's own, no generic calendar reminds you of it. The HE32 annual return guide covers the form's contents and attachments.

When is the corporate income tax return due?

For tax year 2025 the TD4 is due 31 March 2027, and from tax year 2026 the deadline moves to 31 January of the second year after the tax year, so the 2026 return is due 31 January 2028. The self-assessed balance moves with it: the 2025 balance is payable by 1 August 2026 under the old rule, while 2026 tax is payable with the return by 31 January 2028. A checklist written before the reform is planning around dates that no longer apply.

The return is owed by every Cyprus tax-resident company, including loss-making and dormant ones, and it cannot be completed before the financial statements exist, because the tax computation starts from the accounting profit: depreciation is replaced by capital allowances, non-deductible costs are added back, and the provisional instalments are credited against the final liability. The rate applied is 15% from tax year 2026, with 12.5% still applying to 2025 profits. Filing the return late now carries a fixed charge of €250 for a company, or €500 where turnover or assets exceed €1 million.

Does the deemed distribution tail reach your company?

For many owner-managed companies, yes, and it is the item most often missing from checklists written after the reform. Deemed dividend distribution was abolished for profits of tax year 2026 onwards, but the old regime gets two final bites: 70% of the after-tax accounting profits of 2024 and 2025 are deemed distributed two years after each year-end, on 31 December 2026 and 31 December 2027, with 17% SDC to the extent the profits belong to Cyprus-resident, Cyprus-domiciled shareholders. The deemed amount is reduced by actual dividends paid out of those profits during the profit year and the following two years, and the SDC on each deemed distribution is payable with a return by 31 January of the third year after the profit year.

So the December question is concrete: how much of the 2024 profit has actually been distributed, and does the company want to pay a real dividend before 31 December rather than SDC on a notional one? The answer depends on who your shareholders are and where they are resident, and this is one of the few points where advice on your own facts is worth paying for. Non-dom shareholders sit outside SDC entirely. The Cyprus tax reform guide sets out the transitional rules and everything else that changed.

Who runs the year-end when the company is on Sumly?

On Base, most of this checklist is already done when December arrives. The bank feeds reconcile against invoices and recorded purchases automatically all year, every entry stays linked to the document that created it, and the reports are live, so the close is a check rather than a rebuild. You finalise the year-end financial statements yourself and order the audit or review from an independent partner auditor directly in the dashboard, and the auditor can get their own Sumly login to work from the same books. Sumly prepares the return work; you review and submit.

On Premium, your Sumly certified bookkeeper runs the close, prepares the year-end financial statements, works with the partner auditor and submits the filings for you. The audit is always performed and signed by the independent auditor in their own name. If you would rather hand over the whole cycle than run it, the Premium bookkeeping service exists for exactly that, and every plan starts with a 30-day free trial, no card needed.

Questions founders ask

Frequently asked

When should a Cyprus company start its year-end close?

Start in the final quarter rather than the final week of December. The second provisional tax instalment falls on 31 December, and that is also the last day the estimate can be revised. You cannot revise a number you have not yet calculated, so the bank reconciliations and missing documents need to be closed down in October and November, leaving December for the tax estimate and the adjustments.

What does closing the year actually involve for a Cyprus limited company?

Closing the year is two jobs in sequence. First the bookkeeping close: reconciling every account, posting depreciation, accruals and intercompany balances, and locking the ledger. Then the compliance cycle that is built on those books: financial statements, the audit or review engagement, the AGM, the HE32 annual return to the Registrar of Companies and the TD4 corporate income tax return to the Tax Department. The second job can only be as good as the first.

Does a small or dormant company still have to do all of this?

Yes. Every Cyprus company prepares financial statements and has them signed off independently. The smallest private companies, with net turnover up to €300,000 and gross assets up to €500,000 for two consecutive years, may have a review engagement instead of a full audit, but the statements, the HE32 and the corporate return are still owed. A dormant company has no exemption from the HE32, and a dormant year handled late still collects the same penalties.

Can I still change my provisional tax estimate at year-end?

Yes, up or down, until 31 December. If profit has run ahead of the summer estimate, revising upwards before the deadline avoids the 10% underestimation surcharge that applies when the estimate lands below 75% of the final taxable result. If profit has fallen behind, revising downwards stops you prepaying tax you will not owe. After 31 December the estimate is fixed.

Who does the year-end when a company runs on Sumly?

On Base the books are reconciled continuously all year, so you finalise the year-end financial statements yourself and order the audit or review from an independent partner auditor in the dashboard. On Premium your Sumly certified bookkeeper prepares the statements, works directly with the partner auditor and submits the filings. In both cases the audit itself is performed and signed by the independent auditor in their own name.

Cyprus company year-end checklist: closing the books, the audit and every filing