Vat
Requirements
What are the Annual Accounts?
Do you have a private limited company (eg), a public limited company (nv), a cooperative or another organization? In that case, you must file (submit) your annual accounts with the Chamber of Commerce every year. Financial statements are a financial report of your company. House of Companies also provides a tutorial on how to submit your Annual Accounts yourself in The Netherlands, so you do not have to involve any accountant!
What information does an annual account contain?
The size of the company is decisive.
An annual account consists of several parts. The larger a company, the more financial information it has to disclose.
The balance sheet
The balance sheet shows the situation of your company at a given moment (usually December 31). This reflects the result of successive changes in assets and liabilities as a result of your business activities.
The profit and loss account
The profit and loss account gives an overview of the turnover and costs of a company in one year. This allows you to see whether a company is making a profit or is making a loss. Small businesses do not have to disclose a profit and loss account.
The notes
A small legal entity only has to state in the notes the number of persons employed and the way in which the balance sheet is drawn up. For a large legal entity, the explanation is more extensive and, for example, the payments to the management are stated. Larger companies must also file an annual report and an auditor's report.
Below is the complete overview of the sections that a company must deposit.
The size of the company determines the financial information that you must disclose. On this page you will find an overview per business class.
An enterprise falls into a certain business class if the annual accounts meet at least 2 of the following characteristics for 2 consecutive years:
Micro
Assets: <€ 350,000
Net turnover: <€ 700,000
Number of employees: <10 people
Small
Assets: € 350,000 - € 6 million
Net turnover: € 700,000 - € 12 million
Number of employees: 10 - 50 people
Medium-sized
Assets: € 6 - € 20 million
Net turnover: € 12 - € 40 million
Number of employees: 150 - 250 people
Large
Assets: > € 20 million
Net turnover: > € 40 million
Number of employees: > 250 persons
Business class micro and small
The annual accounts for micro and small companies consist of:
limited balance sheet (micro)
limited balance sheet and the notes (small)
Business class medium and large
The annual accounts to be published consist of:
Management Report
Medium size: X
Large: X
Annual accounts
Medium size: Medium-sized
Large: Large
Slightly simplified balance sheet
Medium size: X
Large:
Extended balance sheet
Medium size:
Large: X
Simplified profit and loss account
Medium size: X
Large:
Extended profit and loss account
Medium size:
Large: X
Detailed explanation
Medium size: X
Large: X
Other information
Medium size: Medium-sized
Large: Large
Auditor's statement
Medium size: X
Large: X
Special rights regarding control in the legal person
Medium size:
Large: X
Number of profit-sharing certificates, etc.
Medium size: X
Large: X
Important events after the end of the financial year
Medium size: X
Large: X
Branch offices, their names and country of residence
Medium size:
Large: X
Statutory regulations and proposal profit appropriation or loss processing
Medium size: X
Large: X
Signature and date of adoption / approval
All directors must sign the annual accounts. And if the legal person has supervisory directors, they are all obliged to sign the annual accounts. If the signature of a management board member or supervisory board member is missing, you must state the reason for this (Art. 15 Decree on models of annual accounts).
You are obliged to provide the financial statements with the date of adoption or approval.
What is a Balance Sheet?
A balance sheet is practically indispensable for the preparation of annual accounts. It gives you a better view of the current financial situation of your company. A balance sheet is an overview of all assets, debts and equity of the company.
You should in fact view a balance sheet as a concrete overview of your assets, debts and equity at a specific time.
The balance is therefore mainly a snapshot; This gives you a clear picture of how the company is currently doing financially and whether there is positive or negative equity.
Types of investments
In addition, you can see from the balance sheet which investments you have made in the past period and - even more relevant - how you have financed these expenses.
In addition to energy, starting a company often costs money. As a starting entrepreneur you usually have to invest in many things.
Think of:
investments in relevant business assets (computer equipment, company car, etc.)
renting or buying a suitable business location,
developing or developing a good house style.
Such investments are of course reflected in the balance sheet. It is important to keep in mind that a balance should in fact always be in balance.
That is to say: the amounts on both sides must add up to the same amount.
How is a balance sheet drawn up?
We have included an image below of a standard balance format:
As you can see in the image, in principle a balance always consists of a left and a right side.
Assets
On the left (the asset side, also known as the debit side), you name your assets. This includes, for example, money, goods or debtors.
Liabilities
The right side of the column (the liabilities side, also known as the credit side) is reserved for the debts incurred.
These are divided into long-term loan capital (loans with a term of more than one year) and short-term loan capital (loans with a term of one year), plus your equity capital.
What is the difference between fixed and current assets?
Fixed assets are balance sheet items of the capital goods that last more than one production process or year, such as land and land, buildings, cars, computer equipment and inventory.
Floating assets are - the name says it all - capital goods that only last one production process or even less.
This includes, for example, inventory, but also raw materials, any receivables, debtors and cash.
How are equity, long-term loan and short-term loan capital distinguished?
The equity literally represents the amount that you have invested in your company as an entrepreneur in the past period.
You must report the so-called long-term loan separately, because this concerns a loan or mortgage with a term of one year or longer.
Short-term loan capital, on the other hand, applies to short-term debt, such as salaries for any employees or theof paymenttax.
How long does a balance sheet remain valid?
As mentioned, a balance is a snapshot. As soon as you make a new purchase or deliver a product or service to a new customer, this will have consequences for the balance sheet.
Balance mutations
Processing a purchase or sale is called a ‘balance mutation’. However, it is not conducive to the overview if you have to process transaction in the balance sheet. It is therefore customary to report these mutations separately.
Keep in mind that the balance transactions should also be in balance. Imagine: you bought new computer equipment for the office employees last summer. The costs: fifteen thousand euros.
For the balance mutation, this means that you have to add fifteen thousand euros to your current inventory, while the from the business bank account same amount must be deducted. In this way, the balance remains in balance.
Are you still not quite able to draw up the balance?
Do you have serious doubts that everything is correct? Always submit the balance sheet drawn up by you to an accountant or accountant in case of doubt, to avoid problems and fines.
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The Profit and Loss statement explained
Your profit and loss statement is an important part of your annual accounts. It will help you understand the financial health of your company. Have you made a profit or a loss in the past year?
In the Netherlands, you as an entrepreneur are obliged to draw up a profit and loss account every year. This is also referred to as the income statement or operating account. As a small business owner, you don't have to make it public.
How do you make a profit and loss account?
Each profit and loss account consists of two parts:
The total turnover
The total costs
If you subtract the costs of the turnover, you arrive at the profit or loss.
Writing off
Have you made an investment in a product with a value of more than € 450 excluding VAT, which will last more than a year? In that case you can write off these costs,.This means that you divide the costs over the number of years that the product is likely to last, subtract from the income tax (maximum 20% per year).
Only the part that you deduct in the relevant year will be included in the profit and loss account.
To illustrate: if you buy a computer for € 500 that lasts about 5 years, you can deduct a maximum of € 100 each year and add it to the cost side of the profit and loss account.
Different types of Profit and Loss statements
There is not just one way to create a profit and loss account, there are different models to choose from. The Chamber of Commerce works with the functional model and the categorical model. When your company is hardly, or non, active yet, these models are not relevant for you to file your Annual Accounts.
The functional model
In this model you first display the net turnover and then deduct the costs per activity one by one. This is how you calculate the gross margin. This is the best known and most used form of a profit and loss account. See the image of the Chamber of Commerce below for an example.
The categorical model
In the categorical model, the revenues and costs are grouped together in different categories. An example of such a category is the cost of sales. This includes purchasing costs, storage costs, material consumption and salary costs.
You then deduct all operating expenses per category from the operating income. See the image of the Chamber of Commerce below for an example.
What else do you see in a Profit and Loss statement?
Did you know that you can see a lot about potential pain points in your company in your profit and loss account? For example, high costs due to sickness absence can indicate dissatisfied staff.
If you've spent a lot on repairing old equipment (commercial vehicles or laptops, for example), it may be time to invest in new equipment that lasts longer.
Comparing financial years
You can also specific sources of turnover and costs per year. Is your turnover rising, but have the costs increased just as fast? This can has various potential causes.
In any case, check that your purchase fees are not too expensive. Has your turnover decreased significantly, but are your personnel costs the same? Then it may be time to say goodbye to a few colleagues.
How much does it costs to prepare a Profit & Loss statement?
Of course you can get started with drawing up a Profit and Loss statement. Yet many (starting) entrepreneurs choose to outsource this, once their business grows.
You can check and try our tutorial, to see if you are able to submit the Annual Accounts yourself, before deciding if you need to use an accountant.
When you decide to involve a Dutch accountant, you should that:
Drawing up a profit and loss account is often combined with drawing up the annual accounts.
As a small entrepreneur or self-employed person you pay between € 500 and € 1000 for this service.
As a Branch Out-member you can easily keep the books yourself, especially when your company has a limited amount of transactions.
Frequently asked Questions
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