Download our June 2019 Newsletter
This version of our newsletter covers the following areas:
- Upcoming tax deadlines and how we can assist you
- List of New and Existing resources and calculators to assist with your daily business and tax requirements
The Tax Department (“TD”) has published an Informative Guide which explains the tax treatment of certain benefits offered by employers to employees and persons who hold or are deemed to hold an office. The Informative Guide provides clear guidelines as to the proper valuation of the benefits in kind, for the purpose of consistency, clarity and uniformity, clearing any ambiguities.
In addition, the TD issued Circular 32 and Circular 37 both of which provide additional information on the documentation to be held and how the benefits in kind are calculated.
The taxation of benefits is provided in Article 5 of the Income Tax Law, according to which benefits from any office or employment, provided to an employee or to a member of his family either in cash or otherwise, are subject to tax.
The guide describes how the TD intends to apply the law as from 1 January 2019. Nevertheless, the subject provisions may be applied for previous years as well.
CySEC: findings on Compliance Officer’s and Internal Audit’s reports
CySEC issued today its findings on the Compliance Officer's and Internal Audit's reports in relation to money-laundering and terrorist financing for 2017 and the respective Board of Directors minutes submitted in 2018. Compared to the 2018, CySEC found an overall improvement to the content of these reports.
Summary of CySEC findings on the Compliance Officer's and Internal Audit's reports:
- Insufficient analysis of the specific method/way of conduct of the inspections and reviews performed by the Compliance Officer;
- Inadequate information provided in the Compliance Officers’ Annual Reports on the systems and procedures applied by the Regulated Entities for the ongoing monitoring of customers’ accounts and transactions
- No or limited information provided in the Compliance Officers’ Annual Reports submitted by the Administrative Services Providers in relation to the country of origin and type of high-risk customers with whom a business relationship
- No or limited reference was made in the Internal Audit Reports submitted by the Administrative Services Providers (ASPs) in relation to prior years’ findings and recommendations and ,sometimes, there was no indication of whether these had been adequately addressed and rectified within the reference year, in order
Full Content of the Report
|: March 28, 2019|
|: C 307|
|Subject||: Findings of the assessment of Compliance Officers’ Annual Reports and the Internal Audit Reports on the prevention of money laundering and terrorist financing|
The Cyprus Securities and Exchange Commission (the ‘CySEC’) wishes, with this circular, to inform the Regulated Entities of the following:
- For the purpose of assessing the compliance of the Regulated Entities with their obligations under the Prevention and Suppression of Money Laundering and Terrorist Financing Law (the ‘Law’) and the Directive DI144-2007-08 on the Prevention of Money Laundering and Terrorist Financing (the ‘Directive’), CySEC conducted its annual risk-based assessment of Compliance Officers’ Annual Reports and Internal Audit Reports (the Reports). This riskbased assessment reviews both Reports for this purpose, for the year 2017 and the relevant minutes of the Board of Directors (the ‘BoD’) submitted to CySEC in 2018. Regulated entities are obliged to submit Compliance Officers’ Annual Reports by end of March and the Internal Audit Reports by end of April to CySEC for the previous calendar year.
- In carrying out these assessments, CySEC found an overall improvement in the content of the Reports. In most cases the findings were in line with the requirements set out in the Law, Directive, and Circular C033 on the Content of the Compliance Officer’s Annual Report on the prevention of money laundering and terrorist financing (‘the Circular’), which are enforced by CySEC.
- From the review of the Compliance Officers’ Annual Reports, CySEC has also identified the following common and recurring weaknesses and/or deficiencies which in addition to the measures taken to ensure full compliance, CySEC calls upon all Regulated Entities to dully consider and immediately implement corrective measures.
- In some instances, there was not sufficient analysis of the specific method/way of conduct of the inspections and reviews performed by the Compliance Officer to determine the degree of compliance of the Regulated Entity in the policy, practices, measures, procedures and controls applied for the prevention of ML/TF. This relates to paragraph 10(4)(b) of the Directive and point 2 of Appendix 1 of the Circular.
- Following an assessment of Compliance Officers’ Annual Reports submitted by the Administrative Services Providers (ASPs), it was identified that occasionally no or limited information was provided in relation to the country of origin and type of high-risk customers with whom a business relationship was established or an occasional transaction had been executed, with little comparative data from the previous year. This refers to paragraph 10(4)(g) of the Directive and point 6 of Appendix 1 of the Circular.
- The information provided in the Compliance Officers’ Annual Reports on the systems and procedures applied by the Regulated Entities for the ongoing monitoring of customers’ accounts and transactions was not always adequate when compared with the data and information kept in the customer’s economic and risk profile. In particular, details on the timing of ongoing monitoring of customers’ accounts and transactions (e.g. in real time or after the completion of an event) and the method used for documenting the ongoing monitoring of customers’ accounts and transactions (e.g. preparing a memo describing all relative actions and recording it in the customer’s file) were not sufficient. This refers to paragraph 10(4)(h) of the Directive and point 7 of Appendix 1 of the Circular.
- As regards to the assessed Internal Audit Reports submitted by the Administrative Services Providers (ASPs), CySEC occasionally found that no or limited reference was made to prior years’ findings and recommendations. There was sometimes no indication of whether these had been adequately addressed and rectified within the reference year, in order to ensure compliance with the provisions of paragraph 6 of the Directive.
- Under the Law and the Directive, Regulated Entities must ensure and adhere to:
- The Compliance Officer’s obligation for the correct preparation of the Annual Report and the sufficient assessment of the level of compliance of the Regulated Entity in relation to the prevention of ML/TF.
- The Internal Auditor’s obligation for the correct preparation of the Internal Audit Report and the sufficient review and evaluation of the appropriateness, effectiveness and adequacy of the policy, practices, measures, procedures and control mechanisms applied by the regulated entity for the prevention of ML/TF.
- The obligation of the Regulated Entity’s senior management officials to approve the policies, procedures and controls applied in relation to ML/TF, as well as monitor, and where appropriate, enhance the measures adopted – in reference to section 58C of the Law.
- The responsibility of a designated member of the BoD, to implement the provisions of the Law and Directives, circulars and regulations issued pursuant thereto including any relevant acts of the European Union – in reference to section 58D of the Law.
- The Regulated Entity’s BoD obligation for the sufficient assessment and approval of the Annual Report and the Internal Audit Report. The BoD must take all appropriate measures for the correction of any weaknesses and/or deficiencies identified, as well as the implementation timeframe of these measures.
- CySEC expects that all Regulated Entities take into account the above-mentioned findings when preparing the Reports for the year 2018 and onwards, in order to ensure full compliance with the Law and the Directive. It is stressed that the Law provides strict administrative sanctions in case of non-compliance with the requirements of the Law and the Directive, which CySEC will not hesitate to use.
We are delighted to introduce our expanded range of services and to be able to call ourselves Certified Public Accountants and Registered Auditors.
Our firm is now regulated by ICPAC ("Institute of Certified Public Accountants in Cyprus") and has obtained license to provide Accounting (E989/G/2018) and Audit services (E989/A/2018).
On top of our specialised internal audit services, our services have now been expanded to cover external audit & assurance services, accounting services including payroll services, tax services and corporate services. Our Values (Excellence, Trust, Integrity, Respect and Enhancement) will continue to drive our services with the objective of maximise the value passed to our clients.
Our Range of Services
Our Audit & Assurance services are tailored to meet our client’s unique business characteristics which enables us to provide value adding services starting from day one with the minimum business disruption.
Through our in-depth knowledge and experience in risk based engagements, our Audit & Assurance team is able to effectively apply a risk based approach which enables the execution of an efficient and effective engagement.
- Performing Statutory Audits based on the In-ternational Auditing Standards (IAS).
- Drafting and compiling Financial Statements based on the International Financial Report-ing Standards (IFRSs).
- Filling of Financial Statements to Regula-tors (CySEC) and other governmental bodies (Taxation, VAT Authorities).
- Conducting Management Letters to the Company’s Board of Directors sighting areas for improvement.
Our Accounting & Payroll department deliv-ers reliable outsourced accounting services in-line with the requirements and unique characteristic of each organisation. Our de-partment is staffed with qualified individuals with experience in accounting, auditing and tax services.
Coupled with our internal review proceduresour department is able to deliver top-notch accounting services.
Our Accounting Services
- Bookkeeping: Systematic and comprehensive book-keeping services keeping accurate and updated accounting records.
- Management Accounts: Insightful and detailed management reporting with the objective to im-prove management information and decision making.
- Financial Statements: Preparation of financial statements compliant with the International Ac-counting Standards (IAS) and Interna- tional Financial Reporting Standards(IFRS).
Our Payroll Services
- Payroll Calculations: Preparation of weekly and/or monthly pay-roll calculations correctly accounting for all contributions and deductions.
- Payroll Reporting: Preparation of monthly Payslips, Payroll analysis and Journal Entries for account-ing.
- Tax Compliance Support: Timely preparation and submission of an-nual tax returns e.g IR63 (Employees’ Cer-tificate of Emoluments), IR7 (Employer’s Return), etc.
Our Risk Advisory service line specialises in the provision of Internal Audit services for financial service companies including asset managers, brokers and investment firms.
The Risk Advisory team has knowledge and exposure in Internal Audits, Compliance/Legal and IT areas, therefore, we are capable to de-liver a comprehensive range of Internal Audit services. Our people have had substantial ex-posure in servicing the financial services sector in Cyprus and abroad, covering the FCA and CySEC jurisdictions, which enables us to bring insight and knowledge to our clients.
Our Internal Audit Services
- Outsourced Internal Audit Services
- Co-sourced Internal Audit Services
- External Quality Assurance
- Internal Audit Transformation
- Internal Audit Advisory
Corporations and individuals are required to con-tinually comply with direct and indirect tax require-ments. Our Tax services are tailored to meet our client’s unique requirements through a reliable and personalised service.
Our Tax services can be offered either as stand- alone tax support service or as integrated service through the provision of other related services such as accounting and payroll services.
Our Tax Services
- Tax registration and tax returns preparation
- VAT registration and preparation for submission
- Social Insurance registration and filling/payment assistance
- Assistance in the preparation of personal tax returns
- Tax compliance advice
Our Corporate Services team, along with our ex-ternal partners, aim to assist our clients in comply-ing with the applicable corporate, legal and statu-tory requirements. The range of our Corporate Services consists of registration services, legal support and company administration support.
Our Corporate Services coupled with our auditing, accounting, payroll, tax and risk advisory services form a complete bundle of reliable-high quality services.
Our Corporate Services
- Registration Services
- Legal Services
- Company Administration Services