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Comprehensive Guide to Financial Compliance and Auditing Services in Malta
Precision Point Malta’s Client Accounting team specializes in guiding businesses through the complexities of statutory audits and financial statement preparation, as mandated by the Companies Act. Our services extend to facilitating the submission of these documents to the Malta Business Registry (MBR), ensuring your business adheres to local regulations seamlessly.
Auditing Financial Statements in Malta: What You Need to Know
All limited liability companies registered in Malta are obligated to prepare and submit audited financial statements annually to the MBR. These audits must be conducted by a Malta Accountancy Board-certified auditor in alignment with International Auditing Standards, affirming the integrity of your financial records.
Adhering to GAPSME & IFRS Standards
For financial reporting periods commencing on or after January 1, 2016, the General Accounting Principles for Small and Medium Entities (GAPSME) have become the standard, simplifying financial reporting for SMEs unless otherwise directed by the Board of Directors for compliance with International Financial Reporting Standards (IFRS) as adopted by the EU. This might be essential for businesses that need to align with group accounting policies or are part of a group preparing financial statements under IFRS.
GAPSME has broadened eligibility criteria, making it accessible for a wider range of businesses, as outlined below:
GAPSME reporting thresholds
| Small Entities | Medium Entities | |
|---|---|---|
| Balance Sheet Total | ≤ €4,000,000 | ≤ €20,000,000 |
| Total Revenue | ≤ €8,000,000 | ≤ €40,000,000 |
| Average number of employees | ≤ 50 | ≤ 250 |
Entities exceeding these thresholds are classified as Large which along with Public Interest Entities are required to prepare financial statements in full compliance with IFRS as adopted by the EU.
Financial Statement Disclosure Requirements Simplified
Depending on their classification, entities are subject to varying disclosure requirements. Small entities benefit from streamlined requirements, while medium entities must provide a more comprehensive set of documents. Notably, small companies exempt from preparing a director’s report must submit a declaration to the MBR confirming their exemption eligibility.
Key Deadlines for Financial Compliance
Audited financial statements must be finalized within ten months from the accounting year’s end and submitted to the MBR within an additional 42 days. It’s crucial to also adhere to tax return deadlines to ensure complete compliance.
Streamlining the Audit Process
Precision Point Malta simplifies the audit process for our clients by offering competitive rates and ensuring high-quality audits. From the initial meeting to addressing your inquiries, we manage the entire process, minimizing disruption to your business operations and guaranteeing submission within regulatory deadlines.
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Are all companies in Malta required to submit audited financial statements?
Yes, all limited liability companies both private (Ltd) and public (Plc) incorporated under Maltese law must prepare and file a set of audited financial statements with the Malta Business Registry (MBR) every year. This requirement ensures transparency and adherence to International Auditing Standards, promoting financial integrity within the Maltese business ecosystem.
What are GAPSME and IFRS, and how do they affect financial reporting in Malta?
GAPSME (General Accounting Principles for Small and Medium Entities) and IFRS (International Financial Reporting Standards) are two frameworks governing financial reporting in Malta. GAPSME is the default accounting framework for SMEs, applicable for financial periods starting on or after January 1, 2016, simplifying the reporting process for smaller entities. Larger entities or those requiring alignment with group accounting policies may opt to report under IFRS as adopted by the EU, ensuring consistency across international operations.
How does a company determine whether to follow GAPSME or IFRS for its financial statements?
A company’s choice between GAPSME and IFRS depends on several factors, including its size, operational scope, and whether it forms part of a larger group with specific accounting policies. Companies meeting the GAPSME eligibility criteria can benefit from simpler disclosure requirements, whereas those with international reporting obligations or exceeding GAPSME thresholds might prefer or be required to adopt IFRS standards. Refer to an above table for the GAPSME reporting thresholds.
What are the deadlines for submitting audited financial statements and tax returns in Malta?
Audited financial statements must be approved and filed with the Malta Business Registry within ten months plus 42 days from the end of the accounting year. Additionally, companies must observe the deadlines for submitting their annual tax returns to ensure full compliance with Maltese financial regulations. It’s crucial for businesses to stay informed about these deadlines to avoid penalties and ensure timely compliance.
