Businesses earning below 5 million per year do not have to audit their financial statements

It has been decided under tax ruling (TR-2013/B28) issued on 31 January 2013 that businesses earning below 5 million per year do not have to submit an auditor’s report with their tax return.

Another concession given to businesses earning below 5 million per year is that they can opt to prepare their financial statements on cash basis, instead of accrual basis.  Those preparing their financial statements under cash basis have to submit only their Statement of Comprehensive Income and Notes to the Financial Statements. Unlike before, this concession is granted to companies and partnerships as well.

In addition, this ruling also explains the requirement to submit financial statements by taxpayers and the requirement to appoint auditors by various categories of taxpayers as well as the requirement for registration of auditors with the MIRA. Pursuant to this ruling, auditors registered in the ‘C’ and ‘D’ category will have their registration expire from the date of the ruling. Those auditors who get re-registered after application will be issued with a new registration certificate.

The purpose of bringing changes to the regulation under such tax rulings is to protect the rights of the taxpayers and to mitigate the difficulties taxpayers face in paying taxes.

04 Feb 13