Introduction of new penalty regime for late filing of Annual Return delayed

Parliament has voted to defer the date from which new penalty rates will be applied to companies that fail to file their Annual Return documentation (HE32) within the prescribed time frame. The latest amendment to article 26(b) of Companies (Amending) (No.4) Law of 2020 was approved 7 April 2021. The effect of the amendment is that Article 120(4) of the Companies Law Cap.113 is now enforceable from  1 June 2021 rather than from 1 April 2021.

The Cyprus Bar Association’s announcement, which was published on social media on 7 April 2021, reads as follows:

“You are hereby informed that the Parliament has voted by way of urgency on 02/04/2021 the Law proposal amending Companies Law, according to which article 394 of Companies law is amended so as to move the effective date of article 26(b) of Companies (Amending) (No.4) Law of 2020 to the 1st of June 2021.

The said articles concern the enforcement of monetary penalties by the Registrar to companies for failing to submit HE32 (annual returns) forms. “

The amendment is mainly a concession to companies that may have experienced delays in obtaining finalised audited accounts because of the impact of the Covid 19 pandemic.  Private limited companies are required to submit audited financial statements with their Annual Return.  When implemented, the new penalty fee will start from €50 and increase from the first date of non-compliance at the rate of €1/day for the first 6 months and €2/day thereafter up to a maximum penalty of €500.

For more information on the above please speak with Elena Christodoulou or your usual contact at Elias Neocleous & Co LLC.