Penalties for non-submission of financial statements – Serbia
The Law on Accounting (“Official Gazette of the Republic of Serbia” no. 73/2019 and 44/2021) regulates the deadlines for the submission of financial statements to be made public, which indicates that legal entities, i.e. entrepreneurs with turnover, i.e. statements of inactivity were obliged to submit financial statements to the Business Registers Agency by March 31 for statistical purposes and publishing.
The question then arises: what about the companies, which did not submit financial statements by the deadline? Which regulations are violated and which sanctions are prescribed for those situations?
First of all, the deadlines for the submission of financial statements in Serbia are regulated by the Article 44 Paragraph 1 of the Law on Accounting, so that the Article 57 Paragraph 1 Item 22 stipulates the following:
“A fine of 100,000 to 3,000,000 dinars shall be imposed on legal entities for an economic offence if:
22) they do not submit financial statements, supporting documents and statistical report to the Business Registers Agency for the purpose of their publishing, in the manner and within deadlines prescribed by this Law (Article 44-46”.
With regard to the same question, Article 58 stipulates fines for entrepreneurs in the amount of 100,000 to 500,000 dinars for this economic offence.
When it comes to the Companies Act, this law contains penalty clauses related to economic offences as well as clauses for some criminal acts. Company CEO is responsible for the late submission of financial statement and note about legal entities classification. It shall be pointed out that an engaged entrepreneur or legal entity entrusted with accounting based on a concluded accounting service agreement has contractual relations with the legal entity and they cannot be held responsible for committing or not committing the given economic offences. Only the company CEO, as a person in charge, i.e. person entrusted with the jobs related to the financial operations of the legal entity, has the obligation to create and submit financial statements in a timely manner, which is stipulated by the Article 8 of the Economic Offences Act. According to the Economic Offences Act, besides the fine imposed on a company, the fine for an economic offence most commonly also refers to the person in charge of the legal entity.
Provisions of the Article 225 Paragraph 1 of the Economic Offences Act prescribe that LLC CEO is responsible for accurate bookkeeping, while the Paragraph 2 of the same provision stipulates that the CEO is also responsible for the accuracy of the financial statement data.
One question often arises: who ensures the enforcement of provisions related to non-submission of financial statements. There is no comprehensive institution. However, the distinction between the mechanisms of the Business Registers Agency and the Commercial Court is clear. The Business Registers Agency is in charge of collecting financial statements. If a company does not submit the statement on time, this is automatically entered into the Business entity data register. The Agency initiates offence proceeding before the Commercial Court due to late submission or failure to submit financial reports. According to its annual report, the Agency filed more than 10,831 misdemeanour charges in 2020 due to the violation of deadlines or non-submission of financial reports.