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Friday 25.05.2018 | Name days: Junora, Anšlavs
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35% of Latvian companies do not submit annual reports

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Although normative acts stipulate capital companies have to submit an annual report each year, the actual situation indicates many businesses meet this requirement with delay or hold-up the deadline significantly.

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUOverall, as of May 23, this year, 960 non-liquidated joint-stock companies and 111 977 limited liability companies were registered in Latvia. However, this year annual reports should be submitted at least by 99 652 capital companies established not less than 18 months ago.

Yet, according to the data aggregated by Lursoft, as of May 23, reports were submitted only by 55 369 companies. It should be noted that part of the capital companies have to hand in reports by July 31 and the submission is still continuing. Nevertheless, the number of such companies is small.

Given that on average only about 60% of capital companies meet the requirement of timely submission, there is still an issue of how to encourage businesses to comply with deadlines.

The State Revenue Service (SRS) says at least once every quarter internal audit is carried out, identifying those taxpayers who have not submitted annual reports within the time limits. In order to achieve the submission of annual reports, the SRS calls for taxpayers to do so by sending a notification of the deadline until which the annual report should be submitted.

After cooperating with more than 20 countries’ business registers, Lursoft examined their implemented practices in order to motivate businessmen to file annual reports timely. For example, British normative acts provide for severe penalties for each month of delay, as a result over 99% of all businesses hand in reports timely.

Given about 30-35% of all capital companies fail to submit annual reports in time yearly, Lursoft believes businesses complying with the stipulated provisions should be granted privileges over dishonest economic operators.

For example, companies who have procrastinated the submission of annual reports should be limited the opportunity to participate in public procurements.

Also, the possibility to deny dishonest companies EU Structural Fund co-financing should be assessed. Increasing the amount of sanctions would encourage businessmen to meet requirements more dutifully.

One of the objectives why annual reports should be made publicly available is to create a safe business environment. So, it is essential that third parties have the opportunity to find out about the company’s financial situation or temporary suspension of its operations.

For this reason, it would be necessary to evaluate the available public information. Namely, if the businessman has submitted an application to the SRS on the suspension of business activities, the Register of Enterprises should be notified as well, thus making the announcement available to other businessmen, explains the board member Daiga Kiopa. Neither does she see any reason why such information could not be made public, thereby providing protection of third-party interests.


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  1. Angry says:

    don’t they get it that businessmen do not meet deadlines because of all the paper work they have to manage???

    Thumb up 0 Thumb down 0

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