The deadline for submitting the Estonian annual report is approaching quickly. The annual report gives information
about the company’s progress in the past financial year. This information is public and can be accessed by anyone.
Firstly, an Estonian annual report is mandatory and required by the law. As Estonia has a very transparent business environment, then annual reports can be viewed in e-Business Register and are accessible to anybody who is exploring the market in a field. In addition to competitors, the information in the annual report might be valuable for clients, partners and suppliers who assess the trustworthiness of the company, which therefore affects how and on what conditions they will co-operate with the company. So, baring this in mind, an annual report builds a company’s reputation and shows its trustworthiness.
As the annual report has many nuances and requires time, knowledge and energy, it is recommended to start the process early and not to leave it at the last minute. Whether you want to submit the annual report yourself or with the help of an accountant, here are some most frequently asked questions to speed up the process.
Who is obligated to submit an Estonian annual report and when is the deadline?
All Estonian legal entities need to submit annual reports during the 6-month period after the end of the financial year. If your company’s fiscal year ends on 31 December, then the deadline for the annual report will be June 30, which is the most common date for submitting your annual report.
Do I have to submit an Estonian annual report for a dormant company?
Dormant companies or companies which have not had any business activity are also obligated to submit annual reports. Although, companies are considered to be dormant, if they did not have any transactions (meaning they had not issued any sales nor received purchase invoices or had no asset or liability changes) during the previous fiscal year, then in Estonia there is no separate dormant status and therefore, annual report is mandatory.
How can I submit my Estonian annual report?
The annual report is submitted via the e-Business Register. First, accounting for the whole year must be completed and then an annual report can be prepared and inserted to the registry. Keep in mind that an annual report must be in Estonian. Our accomplished accountants can offer help and do the work for you.
What happens if I fail to submit my Estonian annual report?
If a company fails to submit its annual report, then first, a warning is sent by the Business Register with a new term when the annual report should be submitted. Afterwards, penalties might also be imposed.
Also, it is shown in the Business Register if the company hasn’t submitted its annual report, and it can be seen by the partners and other interested parties.
Who is permitted to file an Estonian annual report?
The annual report can be submitted electronically by the company’s board members. Also, the accountants can obtain the rights to enter, manage and submit a report, if that kind of right is granted by a board member of the company.
How can I give an accountant the rights to manage and submit my Estonian annual report?
You can give an accountant the rights to submit your annual report electronically, if you have an e-Residency card and personal code, which is entered in the e-Business Register.
To provide access to an accountant:
- Log in to the e-Business register: www.rik.ee
- Choose „Annual reports“ and then „Defining persons entering data“
- Click on the button „Add new person for entering data“
- Now fill in the field „Personal identification code of the person entering data“
- Select the company to which you want to add the person entering data
- Tick the box „The person entering data is authorized to submit the report“
- Then click „Save“
After completing these steps, the accountant has the rights to submit the annual report on your behalf.
What happens if I want to give an access to accountant, but my e-Residency card has expired or doesn’t work?
The only solution is to send a letter by post to the Estonian Centre of Registers and Information Systems (RIK). This letter has to state a reason why you are not able to give access to the accountant yourself and that you would like to do so. The letter must contain the information about the accountant (name and ID code) who you want to give access to enter the Annual Report data and the letter must be signed by a board member by hand.
After the registry has granted the right, your accountant can insert the Annual Report and send it for you to sign manually. You can print the report out, sign by hand, take a picture of it or scan it and send it back to the accountant. Then the accountant will submit it.
What does an Estonian annual report consist of?
Mandatory parts of the annual report for all companies are balance sheet, income statement, and notes to the annual accounts. All, but micro-enterprises must also include the management report. For larger companies, cash flow statement and statement of changes in equity, are also required. In certain cases, auditor’s evaluation is mandatory.
Management report is a textual part of an annual report, which provides an overview of the company’s operations, main activities during the financial year, and possible future developments. It needs to be drafted by a board member, but we can help you in the process. Keep in mind that management report can be accessed by anyone. Therefore, consider carefully what the report contains.
Who is subject to a review or audit of an Estonian annual report?
The audit or review of an annual report is mandatory, if at least two of the indicators provided in the annual statement exceed the following conditions:
|Sales revenue or income||1 600 000 euros||4 000 000 euros|
|Total assets at the balance sheet date||800 000||2 000 000|
|Number of employees||24||60|
An audit or review is also mandatory, if at least one of the indicators provided in its annual statement exceeds the following conditions:
|Sales revenue or income||4 800 000 euros||12 000 000 euros|
|Total assets at the balance sheet date||2 400 000||6 000 000|
|Number of employees||72||180|
Compiling an annual report can be complicated and time-consuming. So, if you wish to focus on your core activities, then our experienced accountants can help with composing and submitting your Estonian annual report or offer a consultation. See more information about our annual report service here and send us an inquiry.