The Estonian government has decided to make the control over the submission of annual reports much stricter from February 2023.
They are trying to correct the error, which has led far too many businesses and entrepreneurs to the road of not submitting their annual reports on time or being completely reluctant to do so for years.
So far, the government has given a very reasonable amount of slack and time to submit any missing annual reports by sending reminders and hardly giving out fines. Non-compliance has rarely led to forced liquidations.
Submitting annual reports on time allows both partners and creditors to assess a company’s viability, which is important for ensuring the reliability of a business. Moreover, it is also a clear indicator that a company is operational and compliant with the local laws, thus it can be considered a more trustworthy business.
Recently, the Estonian government approved amendments to the Commercial Code and the new Business Register Act, which aims to bring better results in annual report submission compliance, which will enter into force in February.
After the law enters into force, it will be much easier for the government to give out fines to businesses, board members and even shareholders for not submitting their business’ annual reports on time.
Furthermore, the monetary value of the fine (between €200 and €3,200) can be determined by taking into consideration the circumstances such as how much time has passed since the deadline, how the previous annual report submittal compliance has been, etc.
Also, certain management processes, such as a merger, cannot be done before any missing annual reports are submitted.
Start preparing your annual report today
As the fiscal year of 2022 just ended, our kind suggestion is for you to start thinking about submitting your business’ annual report as soon as possible.
While the deadline is 6 months away, there is a big portion of businesses that start preparing it in June, which often leads to local accounting firms being overwhelmed and possibly to higher service costs due to pressure in the market.
If you would like to start the process today and do it with our help, please reach out to us!