The end of March is fast approaching, which marks the end of the period for compliance with the annual accounts. Companies and companies in Spain that are required to present their financial documents must be extremely vigilant to ensure that their financial data is accurate. In this way, it is possible to achieve a satisfactory result for the next financial year of 2023.
Annual accounts, also known as financial statements, provide valuable information about a company’s results and help potential partners, stakeholders, and investors make investment decisions. This, as well as the deadline given for submitting the annual accounts, makes it essential to stay informed about their requirements.
The components of the annual accounts
The annual accounts consist of a series of documents, which are described below:
- Balance Sheet: This is a summary view of a company’s assets and liabilities, amounting to the total value that the company owns.
- Profit and loss account: It records expenses and income, which allows comparing the profits and losses of the company.
- Changes in Net Worth: This statement shows the changes that have occurred in the company’s net worth, based on capital, profits, and earnings.
- Cash flow statement: This shows the financial movements of the company in terms of cash inflows and outflows.
- Memory: This document offers a general description of the operations of a company such as investments, legal situation, etc.
Declaration of annual accounts in Spain
In Spain, all companies and companies are obliged to declare their annual accounts in the Mercantile Registry within one month of the approval of the final accounts. In addition, the digital declaration is available for public access and will be stored for a maximum of six years.
For online submission, companies must register on the website of the Official College of Registrars to obtain a valid digital certificate. Next, they must download the D2 computer program to guarantee the correct declaration and presentation of the documents.
Companies exempt from declaring annual accounts
Not all companies have to declare their accounts, companies that operate solely through internet sales, as well as micro-enterprises with fewer than 10 employees and income of less than 2 million euros, do not need to declare their accounts.
The importance of declaring the annual accounts
For businesses, an accurate financial statement ensures effective management of resources such as cash, inventories, accounts, and costs. In addition, reliable accounts also generate confidence in potential investors, and the presentation of accurate annual accounts by a company is of great importance for its financial reputation.
Ultimately, submitting an accurate set of financial statements shows how long the business has been in business, how much debt it carries, what resources the business can count on, and its ability to repay a loan.
Not declaring the annual accounts or presenting them after the deadline can lead to sanctions and significant economic losses, which can jeopardize the future prospects of the company. Therefore, in this year 2023, companies in Spain must make sure to submit their annual accounts before the end of July.
Finally, to avoid ‘encounters’ with the Tax Agency, you can count on the support of Entre Trámites to advise you on all issues related to tax procedures. We have specialists ready to help you.
Contact us, if you are self-employed or SME you can schedule a free consultation, call us or write to our WhatsApp!
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