Filenews 23 March 2022 - by Eleftheria Paizanos
A reduction in the administrative burden on micro-enterprises and a simplification of the procedures for auditing their financial statements is expected to occur if the four bills that were put under the microscope of the members of the House Standing Committee on Commerce are approved.
The proposals are in line with a European Directive, whereby Member States can choose a simplified form of financial results.
For the data of Cyprus, however, it seems that the law proposals will cover 90% of the legal entities in the country.
The first law proposal was submitted by DISY, EDEK and DIPA, with the aim of amending the Law on Companies. The proposal will simplify the procedure for the certification (audit) of the financial statements of companies whose net turnover and balance sheet total do not exceed €700,000 and €1,000,000 respectively, through the application of an alternative assurance procedure, which must be carried out by a statutory auditor or a statutory audit firm.
The second and third proposals, by the same parties, amend the laws on Homorhythmon and Heteronormative Cooperatives and Trade Names and on the Certification and Collection of Taxes, respectively, so that their provisions are in line with the proposed amendment of the Companies Law.
The fourth law proposal, submitted by DISY and DIKO, provides for the simplification of the audit of the financial statements of companies whose net turnover does not exceed €200,000, through the implementation of an alternative assurance procedure, which must be carried out by a statutory auditor or a statutory audit firm. According to the rapporteurs, the proposals will reduce the administrative burden on micro-enterprises and will in practice address the issue of the real costs borne by companies and audit firms, due to the work currently being carried out compared to the real benefit.
According to data submitted to the Parliament, 37,000 companies have mixed incomes up to €100,000 and 47,000 companies have incomes of €200,000.
The Ministry of Finance was in favour of simplifying the control procedures, but disagrees with the limits set in the proposals. In fact, the ministry proposed that the legislation should cover companies with €100,000 turnover and €150,000 total assets. The need to set the limits was stressed by a representative of the Ministry of Energy. On behalf of the Central Bank, it has been said that certain entities authorised by the Central Bank and certain payment institutions, banking institutions and credit acquiring companies should be excluded from the proposals. A representative of ICPAC suggested that the limit be kept low in relation to the overall results and gross incomes of the companies. As, he said, they should be kept at €150,000.
