We want to remind you that the deadline for submitting the annual report to the State Revenue Service (SRS) is approaching for companies whose financial reporting year coincides with the calendar year.
Approval and Submission of Annual Reports
The companies shall start preparing the annual report timely to allow for all the necessary steps:
1) preparation of the annual report,
2) signing – additional time may be required if the annual report is signed in paper format and the company's management board members are located in different countries,
3) preparation of the supervisory board report if the company has a supervisory board,
4) preparation of an auditor's opinion if an auditor's examination is required by the articles of association or by law – ATTENTION: the criteria for mandatory audits have been changed (see below),
5) convening a shareholder meeting – at least 14 days are required for limited liability companies and at least 21 days for joint stock companies unless all voting shareholders participate in a meeting with a shorter convening period,
6) approval,
7) submission to the SRS.
Deadline
The deadline for submitting the annual report for 2024 is:
- for small companies and micro enterprises – until 31 May 2025, and
- for medium-sized, large and group parent companies – until 31 July 2025
(Article 97(1) of the Law on Annual Statements and Consolidated Annual Statements).
ATTENTION! The criteria for company classification have changed in 2024. Please check which category your company falls under the new criteria!
A micro-enterprise is an entity that does not exceed at least two of the following thresholds at the balance sheet date:
- balance sheet total – EUR 450,000;
- net turnover – EUR 900,000;
- average number of employees during the reporting year – 10.
A small company is an entity that does not exceed at least two of the following thresholds at the balance sheet date:
- balance sheet total – EUR 5,000,000;
- net turnover – EUR 10,000,000;
- average number of employees during the reporting year – 50.
A medium-sized company is an entity that does not exceed at least two of the following thresholds at the balance sheet date:
- balance sheet total – EUR 25,000,000;
- net turnover – EUR 50,000,000;
- average number of employees during the reporting year – 250.
A large company is an entity that exceeds at least two of the following thresholds at the balance sheet date:
- balance sheet total – EUR 25,000,000;
- net turnover – EUR 50,000,000;
- average number of employees during the reporting year – 250.
(Parts 1, 2, 3 and 4 of Article 5 of the Law on Annual Statements and Consolidated Annual Statements).
Documents to be Submitted
The annual report consists of the following documents (Article 8(2), Article 9(1), Article 52, Article 55 of the Law on Annual Statements and Consolidated Annual Statements):
- balance sheet;
- income statement;
- notes to the financial statements with explanations regarding the information specified in other sections of the financial statements;
- report of the company's management containing the sustainability report and information about the company's financial position, results, risks, future development and other information specified by law.
ATTENTION! The management report must also include a sustainability report. If you need advice on sustainability requirements or assistance in preparing the sustainability report, please get in touch with us!
For medium-sized and large companies, the annual report also includes a cash flow statement and a statement of changes in equity (Article 8(2), Article 9(2) of the Law on Annual Statements and Consolidated Annual Statements).
Micro-enterprises need not prepare a management report; very small micro-enterprises must also prepare notes to the financial statements (Articles 56, 57, 58 of the Law on Annual Statements and Consolidated Annual Statements).
Suppose no group contract has been concluded for a group of companies. In that case, the dependent companies must prepare and approve a report on dependency together with the annual report (Article 30(1) of the Group of Companies Law). Such a report shall be submitted to the Enterprise Register (Article 31(8) of the Group of Companies Law).
The annual report with all its components shall be in Latvian.
Preparing
The annual report is prepared by the company's management board (with the assistance of an accountant) (Article 174(1) of the Commercial Law).
If the company has a supervisory board, the management board sends the annual report to the supervisory board, which prepares a report on the annual report (Article 174(1), Article 175 of the Commercial Law).
The management board of medium-sized and large companies, parent companies of a group, companies whose securities are listed on a regulated market, and companies for which the articles of association require an auditor's examination shall send the annual report to the auditor, who examines it and prepares an opinion thereon (Article 174(1), Article 176 of the Commercial Law, Article 91 of Law on Annual Statements and Consolidated Annual Statements).
ATTENTION! The criteria for the statutory audit of annual accounts have been changed. Verify if your company must be audited!
An auditor's opinion is also required for small companies whose performance exceeds at least two of the below criteria for two consecutive years (paragraph 1 of the e 91(2) of Law on Annual Statements and Consolidated Annual Statements):
- balance sheet total – EUR 1,000,000;
- net turnover – EUR 2,000,000;
- average number of employees during the reporting year – 50.
After receiving the supervisory board's report and the auditor's opinion, the management board delivers the annual report to the shareholders (stockholders) for approval.
Content and Signing
The annual report may be prepared as a single document including all the components listed above, or as two documents (separate financial statements and management report), or by presenting the management report and each component of the financial statements as a separate document (Article 94(1) of the Law on Annual Statements and Consolidated Annual Statements).
At least the following information shall be specified at the beginning of each separate document (Article 94(2) of the Law on Annual Statements and Consolidated Annual Statements):
- the name of the company,
- type (limited liability company, joint stock company, etc.)
- registered address,
- registration number,
- first name, last name and position of the management board members (including those who left office during the reporting year);
- if a supervisory board has been established, first name, last name and position of its members (including those who left office during the reporting year);
- partnerships shall indicate the first name, last name, personal identification number and address of the personally responsible and limited partners instead of the members of the management board and supervisory board.
Each document shall contain a date and signature(s).
Each annual report document (it may be one or several, as indicated above) shall be signed by the management board or a management board member authorised by the management board (Article 95(1) of the Law on Annual Statements and Consolidated Annual Statements). A person who is not a management board member may not be authorised for this purpose. In the absence of such authorisation, the documents shall be signed by all management board members. The annual report shall also be signed by those management board members who disagree with the statements in the annual report, if any, and they shall indicate their objections in a special note (Article 95(2) of the Law on Annual Statements and Consolidated Annual Statements).
Before signing the annual report, please ensure that the management board members' terms of office have not expired and that their right of representation is valid.
The annual report, if it is prepared as a single document or only the financial statement, if it is prepared separately from the management report as one or several documents, shall also be signed by the accountant responsible for the preparation of the annual report or by the outsourced accountant based on an agreement concering such service (Article 95(5) of the Law on Annual Statements and Consolidated Annual Statements).
Electronic Signing
The annual report may be prepared in paper format or electronically (Article 94(1) of the Law on Annual Statements and Consolidated Annual Statements). In the latter case, it shall be signed by affixing a qualified electronic signature containing a time stamp.
If the document is signed in another Member State of the European Union, one of the qualified trust service providers must be selected for affixing the electronic signature. A list of service providers can be found on the European Commission's website at:
https://esignature.ec.europa.eu/efda/tl-browser/#/screen/home
When choosing one of those service providers, please make sure that the service provider is entitled to provide a qualified electronic signature as well as an electronic timestamp.
If a board member does not have an e-signature valid in Latvia, they can obtain it on the Dokobit portal using video identification. Such signatures can be obtained by persons from EU countries (e.g. Sweden, Norway, Germany, etc.) as well as from other countries (e.g. USA, Canada, Turkey, UK, etc.).
If you wish us to assist you in obtaining an electronic signature valid in Latvia for your company's board members, please get in touch with us!
Approval
The management board of the company convenes an ordinary meeting of shareholders (stockholders) to approve the annual report, make a decision on profit distribution and elect an auditor (Article 174(2) of the Commercial Law).
Unless otherwise provided in the articles of association, the management board shall send the notice convening the meeting to shareholders (stockholders) to the contact addresses indicated in the register of shareholders (stockholders) of the company. Suppose an email address of the member (shareholder) is indicated in the register of members (shareholders). In that case, the electronically signed notice of the meeting being convened shall be sent to the email address.
The notice must be sent:
- limited liability companies – at least 14 days before the meeting (Article 214(1) of the Commercial Law),
- joint stock companies – at least 21 days before the meeting (Article 273(1) and Article 273(2) of the Commercial Law).
The annual report is approved with a majority of votes present at the shareholders' meeting. The articles of association may provide for a higher number of votes required.
Annual Reports of Branches and Permanent Establishments
Branches and permanent establishments prepare and submit only a balance sheet, an income statement and a corporate income tax return (Article 4(12) of the Corporate Income Tax Law). These documents for the previous calendar year shall be submitted to the State Revenue Service by 30 April (Article 17(9) of the Corporate Income Tax Law).
Originally Published 27 March 2025
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
