Cyprus Taxation and Accounting

European System of Accounts is often referred to as ESA.  All the members of the European Union follow this system of national accounts that was most updated in 1995. Also known as ESA 95, the system is in complete accordance with the United Nations System of National Accounts. Its accounting rules, definitions and classifications are followed by all the EU countries including Cyprus. However, ESA 95 is currently undergoing amendments to keep up with the current needs and requirements.
Cyprus is the third biggest island in theMediterranean. With its unique location and geographical position, good airline connections, great telecommunications and educated English-speaking population, it offers the right professional infrastructure with legal and institutional support. On an average, Cyprus inhabitants enjoy Mediterranean climate all year long. Cyprus Taxation laws make it a haven for all the offshore investors. In this article you will get to know about Cyprus Accounting and how it conforms to the accounting system in Europe.

The main accounting authority in Cyprus is the ICPAC or theInstitute of Certified Public Accountants, that is bound to comply with the international accounting and auditing standards. All auditors and accountants are approved by the Minister of Commerce an only qualified persons and members of standard overseas accounting bodies are given the approval.

Ever since its accession to full membership into the EU, Cyprus has got access to different economic advantages. It now enjoys full admittance to the Union’s internal market, allowing people with their services and goods to move with complete freedom throughout Europe.

European Union and its accounting systems promote business environment for small enterprises, encouraging public authorities at all levels to share their work experiences and policies in this area. The participating countries inclosing Cyprus remain committed to better legislation and simplifying conditions for economic growth. This is pretty much evident in Cyprus Taxation and accounting systems.

For the very small or micro enterprise, cash basis accounting is followed. Hence, for these companies, financial and accounting statements are prepared on a cash basis. Most members of EU are seen following cash basis accounting for taxation.Cyprus accounting system is one good example. All the accounting transactions of any business are to be recorded in the accounting books to look into their day-to-day management of their operations. The purpose is to fulfill all the governmental obligations regarding taxation and accounts. Often, it is the failure to keep such records and maintain them that leads to the actual failure of the business. Enterprises can use different methods for the recording of accounting transactions.

Citizens of the EU, as well as businessmen, are now facing new business challenges. But, at the same time, there are new and bigger opportunities waiting to be explored in this large economic market. Cyprusoffers some bright prospects to all those offshore investors and will certainly contribute in the future prosperity and growth of the EU. Relaxed Cyprus taxation laws and easy to follow Cyprus accounting systems continue to attract potential investors and businessmen.