Estonia considers fining companies that don't submit annual reports on time
Ministry of Justice in Estonia have proposed that starting from 2016 failure to submit annual reports on time would lead to fines. Also, Ministry of Justice proposes that Tax board will be checking the annual reports after the amendment. Currently there are no sanctions for late reporting.
Nowadays only 60% of the companies are submitting the annual reports on time. Ministry of Justice thinks that by adding sanctions the companies that are ‘being lazy’ would be more active. The data is important: not only to provide updated information about the company’s financial standpoint, but also for reports for Statistics Estonia, Eurostat and European Central Bank. Tax Board believes that by sanctioning companies reporting late the annual reports they could increase the number of annual reports submitted on time to 90%.
It is considered that small and medium-sized businesses are not submitting the annual reports only because of laziness, but also because of they might not have their source documents. At least 4% of small and medium-sized companies are in the situation where their source documents are for example stolen or held by public authorities. Also one reason can be that the records are public, and the companies considers the publicity to be unpleasant.
Tony Koivula, attorney at law of the Gencs Valters Law Firm in Tallinn.
Practising in fields of Public Finance Law in Latvia, Lithuania, Estonia.
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