Why companies lose their audit exemption

Quick answer

An Irish company loses its audit exemption for the following two years if it files its annual return late more than once within five years. The rule applies to the dormant company audit exemption as well as the small company exemption, so a company with no activity at all can still need audited accounts.

What a late annual return is

Every company files an annual return (Form B1) with the CRO each year, with financial statements attached. It's late if it reaches the CRO more than 56 days after the company's annual return date.

The rule

Since 16 July 2025, a small, micro or dormant company that files late more than once within five years loses its audit exemption for the following two years. Late filing fees apply every time: €100, plus €3 a day, up to €1,200 per return.

Why dormant companies are caught

Section 365 of the Companies Act 2014 gives dormant companies their own audit exemption, but applies the same late-filing rule to it. So a company that has done nothing all year can still lose the exemption and need an audit.

What it means in practice

  • The financial statements for the next two annual returns must be audited by a registered statutory auditor.
  • The auditor's report is filed with the annual return.
  • Both returns must still be filed on time.

What to do now

  1. Check the company's filing history, so you know exactly which years need an audit.
  2. Get the accounts prepared and audited in time for the next annual return date.
  3. Consider whether you still need the company: closing it may cost less. See audit or strike off?

Last checked 13 November 2026 against CRO and Revenue guidance. This is general information, not legal advice for your company.