Filenews 5 April 2022 - by Eleftheria Paizanos
The government is concerned about the proposals for a law that change the controls on the financial statements of companies, through the implementation of an alternative assurance procedure.
A competent source told "F" that the law proposals will substantially limit the controls and exclude from them certain professional categories, which are considered by the High Risk Tax Department.
These are professional groups which are under close branding by the competent department, as due to the nature of the professions and the status in which they are located they can easily conceal incomes.
The four bills will be put back under the microscope of the House Standing Committee on Trade today. 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 checking the financial statements of companies whose net turnover and balance sheet total do not exceed €70,000 and €1 million. 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 bill was submitted by DISY and DIKO and 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. Essentially, instead of auditing, these companies will be able to submit their financial statements to an audit by a statutory auditor or an audit firm, provided that their net turnover and balance sheet total do not exceed the limits set by the law proposals, on the date of the company's balance sheet. As was said a few days ago in parliament, the purpose of the proposals is to reduce the administrative burden on small and medium-sized enterprises, but also the practical treatment of the issue of the real costs borne by companies and audit firms, due to the work carried out today, in contrast to the real benefit that both have.
Risk of opening a window for tax evasion
According to a competent source, the proposals will limit control to companies that have a high turnover, which will open windows for tax evasion. He also noted that administrative costs will not be reduced, as the parties that co-sign the proposals suggest. Based on relevant data, about 50% of companies have a turnover of less than €200,000. Specifically, 37,000 companies or 38% which have mixed incomes up to €100,000 and 4,000 companies or at a rate of 49% with total income of €200,000. It should be noted that when the law proposals were being discussed in Parliament, technocrats of the government were in favour of simplifying the procedures, however, they had expressed some reservations in relation to the turnover limits.
