Last updated: 15 March 2018
At the beginning of each year, companies draft their accounts for the previous financial year... Is there any profit to distribute, reinvest or losses to cover? In order to have an overall picture, the companies’ accountants must draft the financial accounts, which must then be approved by the shareholders and filed with the Tax Authority, within certain deadlines, stipulated by the laws in force.
Thus, the Ministry of Public Finance has issued the Order no. 470/2018 regarding the filing of financial situations, published in Official Journal no. 66 on 23 January 2018. The rules concerning the deadline for filing the statements, their content, as well as the penalties for filing the financial situations after the deadline are almost the same as in previous years...
Deadline for Approval
As a general rule, all companies must draft and approve their annual financial statements within 5 months from the end of the financial year, which usually coincides with the calendar year.
Content by Entity Types
Depending on their size (which, as from 2015, is determined using thresholds set in Lei), companies file simplified or more elaborate financial statements. Financial statements must be drafted using the support software developed by the Ministry of Finance.
Companies that file simplified financial statements are micro-companies and small-sized entities: (1) the balance sheet, (2) the profit and loss account and, in addition, for small-sized entities, (3) explanatory notes regarding the annual financial statements.
The more elaborate financial statements are those filed by medium and large-sized entities and include: (1) the balance sheet, (2) the profit and loss account, (3) the statement of changes in equity, (4) the cash flow status and (5) explanatory notes regarding the annual financial statements.
In order to draft the financial statements at 31 December 2017, the classification of entities into micro-companies, small, medium-sized entities and large entities is carried out at the end of the 2017 financial year, taking into account the following indicators: total assets, net turnover and average number of employees during the financial year (as they result from financial statements).
When filing their financial statements with the Tax Authorities, companies must also attach: (i) the directors' report; (ii) the audit report; (iii) a statement from the company's director stating, in broad lines, that the financial statements have been prepared in accordance with the law.
Deadline for Filing
The deadline for filing the financial statements with the Tax Authority remains 150 days from the closing date of the fiscal year, namely until 30 May 2018 (taking into account the fact that this year the month of February has 28 days).
Sanctions
The sanction for non-observance of the legal deadlines for drafting, signing and filing the financial statements is stipulated by Law no. 82/1991 on accounting and this sanction is a fine.
The amount of the fine remains the same as last year. Thus, in the event that the deadline stipulated by the legal provisions for drafting and signing of the financial statements is exceeded (that is, they drafted and signed after 30 May 2018), the fine is between 2,000 Lei (the equivalent of approximately 450 Euros) and 3,000 Lei (the equivalent of approximately 645 Euros).
If companies fail to file the financial statements for the financial year ended on 31.12.2017 until 30 May 2018 at the latest, the fine is between 300 lei (approximately 65 Euros) and 4,500 lei (approximately 968 Euros), depending on the delay.
Moreover, we remind you that, in accordance with Law no. 31/1990 on companies, entities that are very late in filing their annual financial statements may be dissolved. This provision applies when the delay period exceeds 60 business days from the filing date of the financial statements.