Changes to Company Size Criteria and Abridgement Exemptions

On 24^th  December 2023, the EU Delegated Directive (2023/2775/EU) came into force which increased the total balance sheet and turnover thresholds for micro, small, medium and large companies, including groups, as set out in the Companies Act 2014 by approximately 25% to account for inflation.

E.U. member states have until 24^th December 2024 to bring this legislation into effect.

Today, 19th June 2024, Minister for Enterprise, Trade and Employment, Peter Burke, TD signed into law the European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024 (S.I. No. 301 of 2024) which comes into operation on 1st July 2024.

These size thresholds are contained in sections 280A to 280I of the Companies Act 2014.

Company size is typically determined by the company meeting two out of the three size criteria. Other relevant factors also apply.

These adjustments will result in more companies being categorised as micro or small which will, as a result, benefit from the abridgement and audit exemption.  These changes are to apply to financial years commencing on or after 1^st January 2024.

The increased size criteria/thresholds are as follows:

• Micro Company –a balance sheet total not exceeding €450,000, a net turnover not exceeding €900,000 and no more than 10 average employees.

• Small Company – a balance sheet total not exceeding €7.5 million, a net turnover not exceeding €15 million and no more than 50 average employees.

• Small Group- group balance sheet total not exceeding €7.5 million net (or €9 million gross), group turnover not exceeding €15 million net (or €18 million gross) and no more than 50 average employees.

• Medium Sized Company – a balance sheet total not exceeding €25 million, a net turnover not exceeding €50 million and no more than 250 average employees.

• Medium Group- group balance sheet total not exceeding €25 million net (or €30 million gross), group turnover not exceeding €50 million net (or €60 million gross) and no more than 250 average employees.

• Large Company – a balance sheet total not exceeding €25 million, net turnover not exceeding €50 million and more than 250 average employees.

FINAL POINTS

• The legislation comes into effect from 1st July 2024

• The measures apply for financial years beginning on or after 1^st January 2024.

• Companies may elect to apply the measures on or after 1^st January 2023.

• Large company continues to be one that does not qualify as micro, small or medium in accordance with the above.

• All other qualifying conditions remain the same.

Please click for Regulations: https://www.irishstatutebook.ie/eli/2024/si/301/made/en/pdf

For associated articles, please click:

Annual Return for Companies – Ireland – Accounts Advice Centre

CRO mandatory requirement for company directors to provide PPSNs from 11th June 2023 – Accounts Advice Centre

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.