The conclusion of the calendar year, as well as the business and fiscal years in Serbia, often raises questions not only about how we have been conducting business, but also what has changed in comparison to earlier business practices. We witness daily changes and implementation of laws, regulations, rulebooks etc. Consequently, it should be kept in mind that starting from January 2023, certain provisions of the Law on Accounting of 2020 will be in effect.
The application of some provisions of the Law on Accounting from 2020, has started in January 2022, and it refers to the submission deadline, wherein the submission of statistical and final financial statements is eliminated, and a single deadline, which is March 31 of the current year for the previous reporting year, was established.
Additionally, the novelty from last year, which has been applied in this year for the previous one, referred to the alteration of the set of forms depending on the criteria for the classification of the legal entities.
The novelties referring to creating and submitting the financial statements for the business year 2022 are listed in Article 16, Paragraph 1 of the Law. Namely, there it is regulated that keeping business records and creating financial statements for a legal entity, i.e. entrepreneur, can be entrusted by contract in accordance to the law to a legal entity or an entrepreneur which is listed in the Register of Accounting Services Providers. The Register of Accounting Services Providers is kept at the competent Business Registers Agency. Business entities with their internal accounting organizational structure as part of their business organization are exempt from these provisions.
Due to this novelty, all business entities that do not have their own accounting organization but have delegated the management of their business records to an agency or company that provides accounting services, must confirm that those business entities or entrepreneurs are listed in the Register of Accounting Services Providers.
Pursuant to provisions of the Article 43, the financial statements are adopted by the assembly or other competent body of the legal entity, i.e. the entrepreneur.
In accordance with the law, the legal representative, the managing body and the supervisory body are responsible for ensuring the accurate and fair presentation of the following:
1) Regular annual financial statement and annual business report;
2) Consolidated annual financial statement and consolidated annual business report.
Financial statements are signed by the legal representative of the legal entity, that is, the entrepreneur.
For non-compliance with the aforementioned provisions of the Law on Accounting, this law prescribes fines, as follows:
1) from RSD 100,000 to RSD 3,000,000 commercial offence for a legal entity,
2) from RSD 20,000 to RSD 150,000 commercial offence for a person in charge of a legal entity, and
3) from RSD 100,000 to RSD 500,000 entrepreneur’s offence.
Keep in mind that beginning on January 1, 2023 a financial statement created by a legal entity, i.e. an entrepreneur, who is not listed in the Register in the case where the keeping of business records is entrusted, will not be considered complete. This is in accordance with the Rulebook on the conditions and manner of public disclosure of financial statements and keeping the Register of Financial Statements, which was adopted on the basis of the Law. In that instance, the Business Registers Agency (Serbian: APR) will immediately declare the statement to be incomplete.
In addition, it should be borne in mind that Article 225, Paragraph 1 of the Companies Law specifies that the director of a limited liability company is responsible for the proper management of business records, and that Paragraph 2 of the same Article specifies that the director is also responsible for the accuracy of data in the financial statements. If the company fails to deliver the statement on time, this is automatically entered into the Data Register of the Business Entities. The Agency begins criminal proceedings before the Commercial Court for commercial offence due to delays or non-submission of financial statements.
A commercial offence is essentially a breach of regulations on the commercial or financial business operations of a company, prescribed by the law, e.g. the Law on Accounting. Commercial offences fall within the corpus of the Criminal law and a legal entity, as well as the person in charge for a legal entity, are liable for those offences. Financial sanctions are prescribed for commercial offences ranging from RSD 10,000 to RSD 3,000,000, and for the person in charge of a legal entity from RSD 2,000 to RSD 200,000.
Therefore, one must keep in mind: the deadline, the set of statements, and the registered certified accountants. For any of these and similar inquiries, the Creative Finance team is at your disposal.