Regulatory update – Ireland

Previously, under section 363 of the Companies Act 2014, if a company failed to file its annual return within 56 days of its due date, it automatically lost its right to an audit exemption for the following two years.

This strict rule has changed since 16 July 2025. Section 22 of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 (commenced by SI 325/2025) replaces the old provision.

Under the amended legislation:

• A company will only lose its audit exemption (for the next two financial years) if it files its annual return late and has previously filed late in any of the five years immediately before the relevant financial year. This creates a “two strikes” system.
• A company’s first annual return after incorporation, or any failure to file before 16 July 2025, will not count as a prior failure. This means no company is expected to lose its exemption because of late filing in 2025.

Other consequences remain unchanged: late filing penalties will still apply, late filing is still an offense by the company (and possibly its directors), and it remains a ground for involuntary strike-off.