Annual Report for an Estonian Company

Within six months after the end of the financial year, each company registered in Estonia shall submit an annual report to the Commercial Register. The annual report shall be drawn up in Estonian and in the official currency of Estonia (Euro).

Annual reporting is mandatory for all companies registered in Estonia, even for companies that had no activities during the financial year. The annual report shall be submitted within six months after the end of the financial year of the company. Thus, if your financial year ends on December 31, you shall submit the report no later than June 30 of the next year.

All accounting procedures shall be completed before drawing up the annual report.

Mandatory components of the annual report include the management report on the activities of the company, the balance sheet, the profit and loss statement of the company, and the capital statement of the company.

Preparation of an annual report (Estonian language)
from 250 EUR
Preparation of an annual report for operating companies (Estonian and English languages)
from 350 EUR

Filing annual reports: deadlines, fines and exclusion from the Business Register

With the latest extensive amendments to the Commercial Code and the new Commercial Register Act, the annual report deadline remains unchanged: it is still six months from the end of the fiscal year – that is, for most companies, June 30.

It should be borne in mind that the Commercial Register may, without warning, impose a fine on a legal entity for failing to submit a report on time, and that it may be imposed repeatedly, before fulfilling the obligation to submit a report.

When determining the amount of the fine for a failure to submit a timely report, the frequency of the violation, the term of the violation and other circumstances are taken into account. Fine can be assigned to the board, and if there is no board, and to shareholders or shareholders.

In addition, if the report is not submitted by the deadline, the Commercial Register may issue an automatic notice of the exclusion of the legal entity from the register, and three months after the deadline for submission of the report, the company may be removed from the register. The simplified procedure for exclusion from the registry also applies when the legal person fails to fulfil the obligation to appoint a contact person, if such a duty exists. In such a case, it is necessary that the legal entity has no unfinished judicial proceedings, enforcement proceedings and claims on the part of state authorities.

After three years from the date of exclusion from the Business Register, the legal entity can be restored by submitting the necessary documents and data (reports, decisions of the General Meeting, data on appointment of a contact person, etc.). Restoration is also possible for additional liquidation – if, for example, after the exclusion it is found that an undistributed property is assigned to a legal person.

If the general meeting of the legal entity has decided to terminate the activity, instead of the annual report it is necessary to submit the liquidation, compiled at the time of the decision on liquidation. The Act also provides for the possibility of extending the last economic year to 18 months. From the moment of the decision on liquidation begins a new business year, and if liquidation is not completed within 12 months, the legal entity is obliged to submit every year interim reports according to the accounting rules, and, upon completion of the liquidation, a final report. Failure to submit reports by a legal entity in liquidation shall be punished in the same way as in the case of an acting legal entity.

The Joint Stock Company may require the Registrar to remove himself from the Business Register if he or she has not started his or her business, and this is confirmed by all members of the Board and all shareholders. For other forms of business partnerships, the law does not provide for this possibility.

Various options for submitting an annual report to an Estonian company

The portal can submit an annual report by filling in certain forms or uploading the XBRL file to the server if the accounting software used by the company supports this function. In some cases, a PDF file can also be used during the transition period.

Completion of the annual report form

Commercial partnerships, non-profit associations and target institutions can fill in certain forms on the portal, who prepare an annual report in accordance with the accounting customs of the Republic of Estonia and whose reporting period begins on or after 1 January 2009. The entry person must select the main reports and can select additional reports, in accordance with the Accounting Act and the instructions of the Accounting Working Group (Raamatupidamise Toimkond). You should fill in all selected reporting forms in turn. The summation and verification functions assist in the compilation of the report. You can also fill out the board’s declaration and activity report. The cover sheet of the report has already been filled in advance. The portal will then compose the final report file, along with the table of contents and page numbers.

Uploading the XBRL file to the server

The advantage of uploading the XBRL file to the server is that it is created in the accounting software used by the company. Instead of manually entering data into the forms, you can upload it to the server in a ready-made form from your own computer. When uploading the XBRL file to the server, the selected forms will be filled out automatically. Once the records are uploaded to the server, corrections and additions can be made to all the forms thus completed, and a final report can be issued.

Who can report in PDF file

During the transition period, branches, IFRS users, users submitting consolidated reports, users submitting balance sheets, credit institutions, insurers, investment companies, fund managers, users can upload the report to the server in the PDF file, filing liquidation and closing reports and business partnerships, with the beginning of the period of the financial year until 01.01.2009. Their reporting forms may differ from the standard ones and therefore do not need to report on the portal. It is allowed to create a report outside the portal and upload it to the portal server in the PDF file.

How can I report through a notary

During a one-year transition period, the report can be submitted through a notary. The notary should provide the corresponding new forms and the signed report on paper or on electronic media. Then the notary will submit a report to the Commercial Register for the accountable person. For this action, a notarial fee is charged.

FREQUENTLY ASKED QUESTIONS

  • What is the deadline for submitting an annual return in Estonia?
    Annually, no later than 6 months after the end of the financial year (often – the calendar year, from 1 January to 31 December), an annual report should be prepared and submitted to the Commercial Register containing a comprehensive overview of the company’s performance for the previous financial year.
  • Do I need to submit an annual report every year?
    Yes, even if there was no business activity.
  • What should be included in the annual report?
    The information that must be provided in the annual report depends directly on the size of the company.
    • Micro-enterprise
      According to the Accounting Law, micro- and small-scale enterprises can prepare an abridged annual report, which consists of at least two main reports – a balance sheet and a profit statement, as well as up to 3 annexes. The micro-enterprise can (optionally) prepare an abridged or full annual report. Therefore, a micro-enterprise that uses the abridged annual report option is not required to prepare a management report.
    • Small-scale business
      The abridged annual report of a small-scale company is drawn up in accordance with the Estonian financial reporting standard and consists of two main reports: a detailed balance sheet and an income statement, as well as up to 9 annexes. The small business also undertakes to prepare a management report.
    • Medium-sized and large enterprise
      The annual report is drawn up either in accordance with the requirements of the Estonian financial reporting standard, or in accordance with the requirements of the International Financial Reporting Standards (IFRS): a management report, 4 main reports, and an average of 15 annexes. A full annual report is required for medium-sized and large companies as well as non-profit associations and foundations.
  • What language should the source documents be in?
    Service accepts documents for processing in many languages (the accounting department considers each case on an individual basis). A Member of the Board of an Estonian company must be prepared that an Accountant preparing an annual report can ask for clarification of the content of the submitted documents. Financial statements are prepared in Estonian (in the official currency of Estonia – the euro, indicating the degree of accuracy used in figures).
  • What data should the source accounts contain?
    Purchase and sales invoices must include the following information:
    • Title
    • Account number
    • Date of issue
    • Description of purchased goods or services
    • Amounts (quantity, unit price, total amount)
    • Names of supplier and customer
    • Addresses of supplier and customer
    • Supplier company registration number
    • VAT number of the company
  • In what format should a bank statement be submitted?
    Bank statements are allowed in PDF and XML formats.
  • How will the transaction documents be delivered?
    After concluding with Service an agreement on the provision of accounting services, all the source documents of your company must be sent to the provided email address of your assigned Accountant.
  • What accounting software do you use?
    Our Accountants use the following software: SimpleBooks, e-arveldaja, and 1C Company.

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