You have registered the company in Estonia and keep hearing from different sources, that for sure you need to submit your company annual report, keep the deadline in mind. But you are still puzzled about what to bear in mind with the Estonian Company annual report.
We will try to make it easy for you! Here are the most common FAQ our accountants get about the annual report.
In case you feel something is unclear, contact us!
Why is the Estonian Company Annual Report Mandatory?
Estonian annual report is mandatory and required by the law. As Estonia has a very transparent business environment, then the reports for each company are available for everyone puttingthem all in equal stage. You can see all submitted annual reports in the e-Business Register.
Also, the information in the annual report might be valuable for your clients, partners, and suppliers who assess the trustworthiness of the company and therefore widen the cooperation conditions.
It is always a great opportunity to see what competitors in similar fields are doing. So, bearing this in mind that annual report builds a company’s reputation and shows its trustworthiness.
When is the Deadline to Submit the Company Annual Report in Estonia?
The deadline for submitting the Estonian annual report is 6-months after the end of the financial year.
FOR EXAMPLE: If your company’s fiscal year ends on 31 December, then the deadline for the annual report will be June 30.
As the annual report has many nuances and requires time, knowledge, and energy, we recommend you to not leave submitting it at the last minute.
What are the Benefits to Submit the Annual Report Early?
There are many benefits if you submit your annual report early! You
- get your dividends faster;
- avoid fines by the government for submitting late;
- are safe in the case of negative equity, we can help to resolve this issue;
- comply with CFC rules in your country;
- have a good reputation when needed a loan for business expansion;
- keep your company in good standing.
What if the Annual Report Shows Negative Equity?
An annual report is an excellent reality check to understand a company’s current financial state. The most common mistake we see is that there is a feeling that the money on a bank account equals the profit. But it is always not so! An annual report is excellent for the reality check for the company to understand its current financial state.
There might be the case when your annual report shows negative equity of your net assets. We have lots of experience in these cases, and it happens occasionally. The earlier you can make the annual report, the earlier we find a solution to move further. You can read about negative equity and ask for our help.
Who Has to Submit an Estonian Annual Report?
All Estonian legal entities have the obligation to submit annual reports during the 6 months after the end of the financial year.
The annual business report gives information about the company’s progress in the past financial year. This information is public and anyone can access it.
Do I Have to Submit an Estonian Annual Report for a Dormant Company?
Yes. Dormant companies or companies which have not had any business activity are also obligated to submit annual reports in Estonia.
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. In Estonia, there is no separate dormant status and therefore, the annual report is mandatory as for any other legal entity.
How Can I Submit My Estonian Annual Report?
You can submit the annual report via the e-Business Register by following these easy steps:
- Make sure the accounting for the whole year is done (we can always help you if it is not done)
- Prepare the annual report and insert it into the registry.
Keep in mind that an annual report must be in Estonian. Our accomplished accountants can offer help and do this work for you. Order your annual report!
How Do I File an Annual Report in Estonia?
The annual report can be filed electronically via the e-Business Register Company Registration Portal.
What Happens if I Fail to Submit My Estonian Annual Report?
If your company fails to submit the Estonian annual report, then the Business Register will send a warning with a new term for submitting the annual. Afterward, there might also be penalties for that.
Also, your annual report is visible for everyone in the Business Register – so if the company hasn’t submitted its annual report, it gives a shade for the trustworthiness.
Who is Permitted to File an Estonian Annual Report?
Your company’s board members can submit the annual report electronically. Also, a board member of the company can give accountants the right to enter, manage and submit a report.
How Can I Give an Accountant the Right to Manage and Submit My Estonian Annual Report?
All online! You can give an accountant the right to submit your annual report electronically in the e-Business Register if you have an e-Residency card and personal code.
Submitting Estonian Company Annual Report: Step-by-Step.
To provide annual report 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 right to submit the annual report on your behalf. It is super easy once you open the e-Business Register!
What Happens if I Want to Give Access to an 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) . You can find their contacts over here.
What to write in the letter to 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) to 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.
Meanwhile, make sure to talk with the e-residency team to claim or prolong your residency for more convenient processes for the next time.
What Does an Estonian Annual Report Include?
Mandatory parts of the annual report for all companies are the:
- balance sheet,
- income statement, and
- notes to the annual accounts.
All, but micro-enterprises must also include the management report. Larger companies must submit a cash flow statement and statement of changes in equity. In certain cases, auditor’s evaluation is mandatory.
A 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. A board member has to draft it, but we can help you in the process.
Keep in mind that anyone can access the management reports. 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|
How to Get Accounting for an Estonian Company with the Automatic Annual Report?
In case you are interested “automated” solution, you can always subscribe to the company management package, which has an Annual Report in it. They start from 59€/month.
Then our accountants will always take care of your business and reporting and for you the process is easy and you do not need to mark down any specific dates.
Compiling an annual report is a complicated and time-consuming process. 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.
Did not get an answer to your question? Let us know by contacting us.
Need help with the annual report? Order your report