[Cyprus Times] Proposed law to reduce fines for companies that submit their annual reports late

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Proposed law to reduce fines for companies that submit their annual reports late The aim is to facilitate companies facing difficulties due to the conditions created by the pandemic in /quote]

Proposed law to reduce the maximum total fine that may be imposed on a company that fails to submit its annual report to the Registrar of Companies, within the prescribed time limit, was discussed by the Parliamentary Committee on Commerce on Tuesday, with the relevant Ministries expressing their disagreement considering that this would reduce the compliance rate of companies.

The purpose of the law proposal tabled by MPs Elias Mirianthous of the EPP, Stavros Papadouris of the Movement of Ecologists and Panicos Leonidou of the DIKO is to facilitate companies facing difficulties due to the conditions created by the pandemic in submitting their annual reports on time. Specifically, it is proposed to amend the Companies Law in order to reduce from 500 euros to 150 euros the maximum limit of the total financial burden.

A representative of the Ministry of Finance expressed disagreement with the proposed law in the Committee, stating that the proposal is a disincentive for some companies to comply and potentially creates a risk for the image of the Republic of Cyprus in the OECD Global Forum ratings related to tax transparency issues.

A representative of the Ministry of Commerce noted that with the increase in the fine in 2015, the compliance rate of companies in terms of filing annual reports has increased and while the Republic of Cyprus was initially classified as non-compliant in 2015 it had a compliance rate of 53% and in 2020 it had a compliance rate of 63%.

He also said that out of 110,536 companies that were required to file annual reports for the year 2021, only 48,217 complied. He also said that the majority of companies that filed reports late pay a fine of less than 150 euros, as companies are given a six-month grace period and then the fine increases.

KEBE Secretary General Marios Tsiakkis said that due to COVID, accounting firms have been distracted and the understanding of the state is sought during this difficult period to give them a breathing space of time to comply with the law. He said the higher fine could be reinstated after the pandemic is over. And a representative of the OEB said that the reduction of the fine is imperative.

The Director General of the FCC, Kyriakos Iordanou, expressed the view that there is room to keep the penalty but also to have a relaxation for cases that are genuine, and said that in many cases 500 euros is too high and not a proportional fine.

The Central Organising Secretary of POVEK, Kyriakos Moustakas, spoke in favour of the proposed law stating that the amount is very serious and many of the small companies are staffed by 2 people.

The Commission will review the issue in two to three weeks.

Source: CNA

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