Section 22 of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 was commenced on 16th July 2025. The new section changes the rules regarding the loss of audit exemption for small and micro companies that are not part of a group.
Small and micro sized companies will not, automatically lose the privilege of audit exemption on a first occasion, in a five-year period, of late filing of an annual return with the Companies Registration Office (“CRO”). These companies will still be liable to pay late filing penalties for the late filing of the annual return.
The CRO provided the following information in relation to the application of the new section:-
The commencement of Section 22 of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 on 16 July 2025 provides for a change to the current audit exemption regime.
Late annual returns filed up to midnight on 15 July 2025 will require an audit for the following two annual returns.
Effective from midnight on 15 July 2025 audited financial statements are required if a company filed late twice in the last 5 years.
The 5-year reference period is effectively starting from midnight on 15 July 2025 for companies who are not currently filing audited accounts due to loss of audit exemption for late filing of annual returns preceding the enactment.
Application of Section 22
The CRO have confirmed that if a company files its annual return late but before the commencement date, the law at the time of filing applies. The penalty is that the company loses audit exemption for the following two financial years and pays late filing fees.
Section 363(2)(b) confirms that if a company files late after the commencement date, any late filing before the commencement date will be disregarded when deciding if audited financial statements are required, effectively wiping the slate clean.
However, if a company files late in the 5 years subsequent to this late filing, they will have to file audited financial statements for the two years following that future late filing.
For example, if a company has an ARD of 30/09/2024 and has not yet filed its annual return, the new rules will apply if the annual return is filed after the enactment date.
However, if the company filed late in February 2025 (i.e., before the enactment date), the old rules apply. In this case, the company would lose its audit exemption for the following two financial years.
Group Companies
The new audit exemption provisions do not apply to companies that are in small or micro group. Group companies, where one or more of the companies in the group is late filing, will have to apply to the District Court to retain the audit exemption for the group. Otherwise, all the companies in the group will not be entitled to claim audit exemption for the following two financial years.
District Court Option
Companies that are late may still apply to the District Court for an extension to file a late annual return and to retain the audit exemption if the company was entitled to claim the exemption for that late annual return.
New Note in CORE
CORE has been updated to reflect the new provision, and the following is the new note:-
Auditors details must be completed if the company cannot claim audit exemption. Late annual returns filed up to midnight 12:00 AM on July 16th will require an audit for the following two annual returns. Effective from midnight 12:00 AM on July 16th audited financial statements are required if your company filed late twice in the last 5 years from midnight 12:00 AM on July 16th
If this annual return is late you may be required to file audited financial statements for the next two annual returns. If you feel you have just cause you may apply to the District Court for an Extension of Time to File. The CRO may object but the decision is solely at the discretion of the Judge on the day. More information on this process can be found at Missed Deadlines – CRO
If the company is claiming the exemption from audit in respect of the financial year covered by the financial statements uploaded with this return, please select the appropriate option below
Check with CRO
If companies are unsure whether the new rules apply to the annual return they may contact CRO by email annualreturns@cro.ie to confirm the filing requirements.
NB: The content of this article is provided for information purposes only and does not constitute legal or other advice.
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