As of 16 July 2025, important changes have come into effect that will significantly ease the compliance burden on small and micro companies in Ireland. These changes, introduced by Section 22 of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024, amend the rules around the loss of the audit exemption under the Companies Act 2014.

Overview of key changes 

Under the old rules, if a company filed a late annual return, even once, it automatically lost its audit exemption for two years. This meant companies would incur late filing penalties in addition to costs of preparing audited accounts for two years. A company’s audit exemption could only be restored through a successful application to the District Court, which is a time consuming and costly process.

Under the new rules, small and micro companies will only forfeit their audit exemption status for failure to file its annual return (on time) for a second time in any of the previous five financial years. These changes offer significant cost benefits for small and micro companies. Going forward, a first-time late filing will only incur the usual late filing penalties. 

What this means for small and micro companies

These changes are particularly welcome by small and micro companies and mean:

• Cost saving - No need to pay for two years of audited accounts after a single late annual return filing.
• Flexibility – A fairer system for Companies with an occasional misstep.

As Minister Peter Burke noted, the previous rules had a “disproportionate impact” on small businesses. The updated framework reflects a more practical approach to compliance and encourages timely filing without imposing excessive penalties for an isolated late filing. 

Companies Registration Office notice 

The Companies Registration Office (CRO) issued a formal notice on the 17 July 2025 regarding the audit exemption changes and provided the following key points:

• Old rules still apply for past late filings - late annual returns filed up to midnight on 15 July 2025 will still result in the loss of audit exemption for the following two annual returns under the old rules.
• New "two strikes" rule - from midnight on 15 July 2025 onwards, companies will only lose audit exemption if they have filed late twice within a five-year period. The five-year reference period for assessing late filings takes effect from midnight on 15 July 2025.

Need help understanding your status? 

If you’re unsure how this affects your company or need help with your annual return, get in touch for guidance and support with annual returns compliance, and audit exemption eligibility.