Companies that have not respected the legal deadline of May 29 for the submission of annual financial statements risk fines that vary from several hundred to several thousand lei, fines that, starting this year, will have to be paid in full, without the possibility of being halved if paid within 15 days of imposition. In addition to financial penalties, failure to submit financial statements for 2023 may lead to reputational risks and, for micro-enterprises, even the loss of this favourable tax regime.

The accounting law penalizes both the failure to submit balance sheets and their late submission. Companies that do not submit their 2023 financial statements at all risk fines of 5,000 lei, while, if they submit them late, the fines can be relatively lower, being determined according to the period that has passed since the final submission deadline. Thus, for delays of up to 15 working days from the legal deadline (fulfilled on May 29), the fine applied can be between 300 and 1,000 lei, and the amount of the sanction then increases progressively: for 16-30 working days late, the fine varies from 1,000 to 3,000 lei, and if the submission deadline was exceeded by more than 30 working days, the fine starts at 1,500 lei and can reach up to 4,500 lei.

The legislation equally sanctions the incorrect or incomplete submission of financial reports, as well as the lack of mandatory documents from their content, each of these facts having its own range of sanctions.

For example, the presentation of financial statements that contain erroneous or uncorrelated data, including regarding the identification of the reporting person, is fined between 1,000 and 3,000 lei, and the violation of the rules for drawing up or signing the balance sheets is sanctioned with amounts from 2,000 lei to 3,000 lei.

Also, the lack of the administrator’s written statement that he assumes responsibility for the preparation of the annual financial statements is also sanctioned, the amounts varying between 2,000 lei and 10,000 lei. We remind you that this declaration is mandatory and through it the administrator confirms that the accounting policies used in the preparation of the annual financial statements comply with the legislation and that the submitted balance sheets provide a true picture of the financial position and the company’s activity.

The largest fines, between 30,000 and 40,000 lei, are provided for companies that have the legal obligation to audit their financial statements and do not do so.

As the sanctions landscape shows, breaching the rules for submitting annual financial statements can have very serious financial consequences for companies, especially in the context where many of the fines can be applied cumulatively, making the total amount of financial sanctions imposed on a company to grow significantly.

Moreover, all these fines will have to be paid in full by the companies that receive them, in the context in which the Tax Reform Law (Law 296/2023) considerably tightened the legal regime for fiscal-accounting fines and eliminated the possibility of them being paid to half of their minimum value when paid within 15 days of imposition.

Beyond pecuniary sanctions, failure to submit annual financial statements can also attract other types of indirect sanctions, introduced for the first time in tax legislation. More precisely, the timely submission of financial balance sheets has become an essential condition for fiscal operation as a micro-enterprise from 2024. The new regulations applicable from this year establish that micro-enterprises will have to pay the profit tax if they do not submit their financial statements for the previous year on time. The transition to profit taxation will be made starting from the quarter in which the balance sheets should have been submitted.

The good news for companies is that company legislation has been amended so that there is no longer any risk of dissolution for failure to submit financial statements and mandatory accounting reports.

Until 2022, the Companies Law established that, at the request of any interested party, including ANAF, the Ministry of Finance or the Trade Registry, the court could order the dissolution of a company if it did not submit its annual financial statements or accounting reports. As of November 26, 2022, however, the provision has been removed, so that firms now only risk the fines provided for in the previously detailed Accounting Law, not this additional and particularly serious sanction of termination.

Even so, filing financial statements must remain a priority for companies, and those that have not yet completed their 2023 reporting should hurry to submit them to the authorities, even at the risk of late fines. Not submitting balance sheets at all is even more risky and can be seen as a red flag, drawing the attention of the tax authorities to the respective companies for more elaborate controls or checks.

Article published in Business-Mark