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

The year-end for a Cyprus limited company is two jobs, in order. First you close the books. You reconcile every bank account, chase every missing receipt, and post depreciation, accruals, prepayments and intercompany balances. 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, the AGM, the HE32 annual return to the Registrar and the corporate income tax return to the Tax Department. Miss 31 December and you can't put it right afterwards, so we plan the close across the whole last quarter.

What does closing the year involve?

Closing the year means getting the ledger to a fair picture of the financial year, then passing it, in order, to everyone who relies on it. The auditor signs the accounts. The shareholders receive them at the AGM, the annual general meeting. The Registrar gets them attached to the HE32. The Tax Department gets the corporate return worked out from them.

That order is why the bookkeeping matters more than it looks. One unreconciled bank account, or a supplier invoice posted in the wrong year, flows into the provisional tax estimate, the tax computation and every filing after it. The law also expects the ledger to be current long before December. You must update your accounting records no later than the end of the fourth month after the month of the transaction. A year of untouched books is already a breach before the close starts.

What should you reconcile before locking the books?

Everything you can check against something outside your books. We run it in this order, because each step makes the next one easier.

The state of the ledger drives most of the audit fee. An auditor quotes for the work in front of them. Clean books mean a straightforward review. A year of unreconciled accounts means rebuilding them at the auditor's hourly rate.

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, pays two equal instalments on 31 July and 31 December, and can revise the estimate any time before 31 December. From tax year 2026, a company incorporated, or starting to earn income, after 30 June files by 31 December instead and pays a single instalment that day.

The underestimation surcharge is what gives the deadline its teeth. If your estimate turns out below 75% of the final taxable income, you pay an extra 10% of the difference between the final tax and the provisional tax paid. File no estimate at all and your provisional income counts as nil, so the 10% applies to the whole final tax.

Say your 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. That's €600 a five-minute revision in December would have saved. A company running behind its estimate revises down instead, and stops prepaying tax it won't owe. Provisional tax in Cyprus explains how the estimate works and how the instalments count against the final bill.

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

The closed books produce the financial statements. The audit or review is the independent sign-off on them. The AGM is where the shareholders receive them. Cyprus has no size exemption from the sign-off. Every company prepares financial statements under IFRS, the International Financial Reporting Standards, and has them audited by statutory auditors licensed under the Auditors Law.

The smallest companies can have a review engagement instead of a full audit. A private company qualifies when net turnover is no more than €300,000 and gross assets no more than €500,000, both for two financial years in a row. The turnover limit rose 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 sales suggest. A review is a lighter check, done by the same kind of licensed auditor, and every filing after it is the same. Cyprus audit requirements covers who qualifies and what the auditor will ask for.

Once signed, the statements go to the shareholders at the AGM, and the same set goes to the Registrar with the annual return. That chain is why the accounts can't slip. A late audit makes every filing after it late too.

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

The HE32 annual return goes to the Registrar of Companies, separate from anything you owe the Tax Department. It shows your company's details as at a date of its own, called the made-up date. You file it within 28 days of that made-up date, once per calendar year, and draft the first one the day after the first 18 months from incorporation run out. The filing fee is €20, and you attach 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 is small, but if you keep not filing, the company and its officers face prosecution and, in the end, strike-off. The made-up date is your company's own, so no generic calendar will remind you. The HE32 annual return guide covers what goes on the form and what to attach.

When is the corporate income tax return due?

For tax year 2025, the TD4 is due 31 March 2027. 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 payment of the self-assessed balance moves with it. You pay the 2025 balance by 1 August 2026 under the old rule, and 2026 tax with the return by 31 January 2028. A checklist written before the reform plans around dates that no longer apply.

Every Cyprus tax-resident company owes the return, including loss-making and dormant ones. You can't complete it before the financial statements exist, because the tax computation starts from the accounting profit. It swaps depreciation for capital allowances, adds back costs that aren't deductible, and credits the provisional instalments against the final bill. The rate is 15% from tax year 2026, with 12.5% still applying to 2025 profits. A late return 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 most checklists written after the reform miss it. Deemed dividend distribution was the rule that treated part of a company's profit as paid out to its shareholders, and taxed it, even when no dividend was paid. It ended for profits from tax year 2026 onwards, but it has two last bites. 70% of the after-tax accounting profits of 2024 and 2025 count as distributed two years after each year-end, on 31 December 2026 and 31 December 2027, with 17% Special Defence Contribution, or SDC, to the extent the profits belong to shareholders who are Cyprus resident and Cyprus domiciled. Actual dividends paid out of those profits, in the profit year and the two years after, reduce the deemed amount. 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 have you actually paid out, and would you rather pay a real dividend before 31 December than SDC on a notional one? The answer depends on who your shareholders are and where they are tax resident. This is one of the few points where paying for advice on your own facts is worth it. Non-dom shareholders, Cyprus tax residents who are not domiciled here, 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?

That depends on your plan. On Base, most of this checklist is already done when December arrives. Bank feeds match payments against invoices and recorded purchases automatically all year, every entry stays linked to the document behind it, and the reports are live. The close is a check, not a rebuild. You finalise the year-end financial statements yourself and order the audit or review from an independent partner auditor in the dashboard. The auditor can have their own Sumly login and work from the same books. Sumly prepares your returns, and you review and submit them.

On Plus, you keep the books and Sumly files your VAT, VIES, payroll, provisional tax and corporate tax returns. VIES is the EU listing of your sales to businesses in other member states. Only Premium includes the year-end financial statements.

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. On every plan, the independent auditor carries out the audit and signs it in their own name. If you'd rather hand over the whole cycle than run it, that's what the Premium bookkeeping service is for. The software starts with a 30-day free trial.

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