Accounting services in Cyprus

Who We Are?

LFTA is a team of specialists in financial accounting and accounting services. Our staff includes certified accountants, bookkeepers, and lawyers. Since 2017, we have supported businesses of all sizes — from sole proprietors to holdings, IT companies, and international groups. We help maintain accounting accurately, transparently, and without risk of sanctions. Our services cover the entire territory of Cyprus.

What We Do?

We submit reports strictly on time: Annual Return (HE32), audited financial statements, Income Tax Return (IR4), VAT Reports (Form VAT100). We assist in obtaining tax residency, applying the non-domicile regime, and preparing for ESR, DAC6, and transfer pricing requirements.

Why Clients Trust Us?

Our team combines the precision of accounting services in Cyprus with deep expertise in international tax law. We support companies with nominee directors and beneficiaries and solve complex cases involving the IP-Box tax regime.
We take full responsibility for the accuracy and timeliness of accounting. LFTA is not just a contractor but a financial partner: covering all needs within tax and accounting services from company registration to final audit.

How we build the process

  • Conduct an audit of the current business structure and accounting system.
  • Develop a personalized package of accounting and legal services.
  • Take over accounting, document processing, and report filing.
  • Provide access to a personal dashboard with full reporting and clear communication.
  • Connect additional services as needed — tax planning, international activity consulting, automation aligned with Cyprus law and IFRS standards.
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Accounting in Cyprus: Jurisdictional Features

Cyprus is an attractive jurisdiction with a low effective tax rate and a flexible corporate accounting system. However, accounting and tax obligations here are strictly regulated. Failure to meet reporting deadlines or errors in calculations can lead to fines, blocking of corporate accounts, or additional tax assessments. Below are key aspects of accounting and reporting that all resident companies registered in Cyprus must comply with.

Financial year and audit

The financial year ends on December 31. Every Cypriot resident company, including both active and dormant entities, is required to prepare audited financial statements annually according to International Financial Reporting Standards (IFRS). Audits must be conducted by licensed auditors registered with ICPAC or a similar body.

Annual Return (HE32)

The company’s annual return (form HE32) must be filed within 28 days after the anniversary of registration. It contains up-to-date information on capital structure, directors, shareholders, and company address. The return is submitted to the Registrar of Companies.

Tax reporting

The corporate income tax return (IR4) is filed annually, usually by March 31 of the second year following the reporting period. For example, the 2023 report is due by March 31, 2025.
Advance corporate income tax payments are made twice a year — on July 31 and December 31 based on estimated profits. Final calculation and any additional payment occur in August of the following year.
The corporate tax rate is 12.5%, but it may be reduced under the IP Box regime or other tax planning tools.

VAT (value-added tax)

Companies registered for VAT must file VAT returns quarterly. Deadlines depend on the designated tax period. The standard VAT rate is 19%, with reduced rates of 5% and 9% applicable in certain cases. Returns are submitted electronically via the Tax for All portal. Late submissions incur penalties and fines.

Additional obligations

Accounting must comply with Companies Law, Cap. 113, Income Tax Law (N118(I)/2002), and VAT Law (N95(I)/2000).
Companies subject to Transfer Pricing rules must prepare documentation and reporting in line with OECD guidelines.
Entities with non-domicile status, nominee directors, IP Box, ESR, or DAC6 requirements must submit specialized forms accordingly.

Electronic submission of documents

All financial and tax reporting is submitted exclusively electronically via Taxisnet and Tax for All. Companies must pre-register and maintain up-to-date information on their representatives and signatories. This applies equally to large and small businesses.

Why outsourcing is more advantageous than an in-house accountant in Cyprus

The advantages of outsourcing accounting services can be listed endlessly. Here are 10 key points:

  • One accountant means one vacation, one sick day, and one mistake. Outsourcing is a team. Someone steps away — another picks up. No downtime, no delays, no emergencies.
  • Errors in reporting mean fines from tax authorities and blocked access to Taxisnet. With outsourcing, the company takes responsibility for every document.
  • The financial year in Cyprus ends on December 31, but reporting stretches until August of the following year. A professional team plans the workflow considering all deadlines: IR4, HE32, VAT, contributions — everything under control.
  • One person cannot master everything: IP Box, transfer pricing, DAC6, ESR. Outsourcing employs narrow specialists who step in as needed. No need to pay for unnecessary services.
  • An in-house accountant means salary, social insurance contributions, and compliance with labor laws. Outsourcing is a fixed fee. Everything else is the contractor’s responsibility.
  • The Cypriot reporting system is built on electronic platforms: Taxisnet, Ariadni, Registrar of Companies. Experienced accountants are already integrated with these systems. Saves on training and adaptation.
  • Local authorities frequently change requirements: new forms, submission rules, additional audits. The external team monitors changes in Companies Law, VAT Law, Income Tax Law, and reacts immediately.
  • Hiring a good accountant in Limassol or Nicosia is difficult and expensive. An outsourcing company is available across all Cyprus without geographic limits.
  • Scaling is unlimited. More employees, a new office, export launch — the accounting package expands painlessly and without delays.
  • Security. A company operating on the market has contracts, responsibility, and reputation. A single freelancer on staff has none of these.

Industry-specific accounting — from IT to trade

There is no one-size-fits-all approach to accounting in Cyprus. For software companies and other IT enterprises, tax treatment follows one logic, while e-commerce operates under a completely different set of rules. At LFTA, workflows are tailored considering industry nuances, Cypriot legislation, and EU requirements.

IT and IP companies

We work with IP Box, register intellectual property rights, and design structures to protect assets and optimize taxes.

E-commerce and marketplaces

We navigate VAT OSS/IOSS regulations. Assist in setting up reporting for EU deliveries, taking into account seller and client jurisdictions.

Holdings and investment structures

We support groups with passive income. Assess risks under ESR, prepare transfer pricing documentation, and handle tax residency.

Freelancers, digital nomads, startups

We advise on LTD registration, simplify paperwork, and help confirm non-dom status. Focus on flexibility and simplicity.

International groups

We organize consolidated reporting and automate processes under IFRS standards. Set up transparent interaction schemes with parent companies.

Each sector requires a distinct approach. Minimum risks, maximum benefits.

Audit — a mandatory stage for all LTDs

There are no exceptions in Cyprus: all LTD companies undergo an audit — even if they have had no activity. This is not a mere formality but a thorough business check for legal compliance.

The auditor reviews not only the numbers but also evaluates:

Ownership structure

Income sources

Tax status of directors and beneficiaries

Missing deadlines leads to fines. Late reporting risks TIN suspension, removal from the register, and banking problems.

LFTA provides full audit support. We work exclusively with licensed auditors, plan the process in advance, and eliminate emergencies and paperwork hassles. Everything is done on time and stress-free.

How to switch to outsourced accounting

A simple transition scheme is offered for moving accounting to outsourcing, including for technology companies (accounting and audit services for holding companies):

Audit of the current model. Analyze how accounting and financial records are currently managed: what works, where the risks are, and where savings can be made. Assess completeness of documentation, reporting deadlines, and compliance with Cyprus law.

Commercial proposal with rates and terms. Based on the audit, prepare a tailored offer — clear, without hidden fees. Specify included services, costs, deadlines, and guarantees. Provide several options to choose the optimal one.

Contract signing and service launch. After agreeing on terms, sign the contract. From this moment, take full responsibility for accounting and tax processes — bookkeeping, preparing and submitting reports, interaction with tax authorities and registrars.

Communication via a personal manager and electronic document flow.
Assign a dedicated manager who supervises all issues, solves tasks, and controls deadlines. Use cloud platforms for document and report exchange with 24/7 access — convenient, secure, and paperless.

This approach ensures a smooth transition without disruptions and immediately improves accounting efficiency and security. Recommendations for IT systems integration or tax planning can be provided upon request.

Full range of accounting and HR services by LFTA

LFTA provides a complete set of accounting and tax services for companies operating in Cyprus:

Accounting and financial reporting

  • Processing of primary documents and accurate transaction records.
  • Preparation and submission of annual financial statements: balance sheet, P&L, cash flow, and changes in equity.
  • Asset accounting, including fixed assets.
  • Use of professional accounting software for bookkeeping.
  • Interaction with regulatory authorities.

Payroll and HR support

  • Full HR document management.
  • Payroll calculation and social contribution handling.
  • Preparation of annual T.D.1 forms and reports for Social Insurance Department.
  • Hiring and dismissal documentation.
  • Business travel expense calculation and income certificates.
  • Registration of company and employees with social services.

Tax reporting

  • Preparation and filing of VAT, VIES, and INTRASTAT returns.
  • Corporate tax declarations and financial statements.
  • VAT-related operations recorded in full compliance with Cyprus tax law.

Audit and compliance control

  • Independent external audit by certified professionals.
  • Monitoring of tax compliance and accounting accuracy.
  • Tax planning with a clear payment calendar.
  • Scheduled automatic tax write-offs.

Representation and regulatory compliance

  • Responses to requests from tax authorities.
  • Representation during audits and inspections.
  • Full support during tax reviews.