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New EU accounting directive and implications on the filing of accounts to the Registrar of Companies

The New EU Accounting Directive has been implemented into Maltese legislation, resulting in changes to the accounting framework as well as filing requirements for Malta Companies. Company directors should be aware of the new accounting rules which have become applicable for financial years commencing on or after 1st January 2016, relating to the preparation and presentation of annual accounts. It is the responsibility of directors to ensure that annual accounts in respect of their company are prepared and filed with the Registrar of Companies in accordance with the revised Companies Act.

Companies that qualify as a small company

Directors of companies qualifying as small companies who want to take advantage of any exemption granted to such companies by the Companies Act are required to make a declaration as referred to in Article 183(3) of the Act when submitting their companies’ annual accounts to the Registrar on the relevant template declaration, Template DD2 for the first accounting period and the Template DD1 for subsequent years. The template declaration may be downloaded from the Registry of Companies website under the Official Registry Forms section.

This declaration, duly signed by the same directors who signed the balance sheet, is to be filed at the Registry of Companies together with the relative annual accounts when such accounts do not include: 

- the Directors’ report, and/or
- the Profit & Loss account/Income statement

The directors making the declaration must tick the appropriate boxes. Directors are to ensure that the basis on which the company is entitled to be considered as a small is correctly declared. When in doubt directors are urged to seek clarification or confirmation from their accountants or advisors.  It is to be noted that giving a false statement or declaration to an authority is an offence in terms of law.

Accounting & Filing for a Parent Company

Directors of a parent company may prepare consolidated accounts, although a number of exemptions remain allowing for the non compilation of consolidated accounts. There is no need to include a copy of its profit and loss account with the annual accounts, provided the following conditions are satisfied:

a. the application of this exemption is disclosed in the notes to the accounts of the parent company and in the notes to the consolidated accounts; and

b. the total profit or loss of the parent company, shall be shown separately either on the face of the parent company’s balance sheet or in the notes to the accounts of the parent company.