Legislators on Tuesday began discussing a series of bills designed to reduce administrative costs for small and medium-sized businesses by simplifying the way they prepare their annual financial statements.

The initiative is prompted by the EU’s ‘accounting directive’.

Under the envisioned simplified process, accounts would be certified by a legitimate auditor or auditing firm.

Three of the legislative proposals relate to companies with a turnover and balance sheet of under €700,000 and €1 million, respectively; the fourth bill concerns companies with a turnover of under €200,000.

In parliament, a representative for the Central Bank said they generally agree with the idea, but that certain companies – like banks and credit-acquiring entities – should be exempt.

For its part, the attorney-general’s office confirmed that the bills comply with the provisions of the relevant EU directive. A rep said the proposed bills would cover about 90 per cent of corporations in Cyprus.

The finance ministry asked for time to study the proposals. Their only fundamental disagreement related to the turnover threshold of companies.

A Tax Department official said there are approximately 37,000 companies – or 38 per cent of the total – with gross income up to €100,000, plus 47,000 companies with gross income up to €200,000.

Under the EU’s accounting directive, companies with limited liability doing business in the EU, whatever their size, have to prepare annual financial statements and file them with the relevant national business register. Groups have to prepare consolidated financial statements.

The accounting directive aims at reducing the administrative burden for small companies. It allows a simplified reporting regime for small and medium-sized enterprises and a very light regime for micro-companies (those with less than 10 employees).