Accounting obligations of a commercial business

Verified 01 March 2024 - Directorate for Legal and Administrative Information (Prime Minister)

A business business is subject to several accounting obligations. These include invoicing, keeping accounts and certain records, drawing up annual accounts and keeping accounting documents.

The accounting obligations of the business depend on its taxation system: simplified real regime or ordinary real regime of taxation.

It shall be subject to simplified effective taxation system if it meets all of the following conditions:

  • The turnover of the business shall not exceed:
    • €840,000 for activities relating to the sale, catering or supply of accommodation
    • €254,000 for other activities
  • The amount of VAT for which it is liable is less than €15,000

The business is submitted to the normal effective system of taxation if it exceeds these thresholds.

Simplified effective tax system

The business is held to invoice for all its sales.

All important billing information is described in the card “All about billing”.

Warning  

Failure to comply with the billing rules is punishable by a fine of up to €375,000. In the event of repeated infringement, the fine may be increased to €750,000.

A business business must keep records. On the other hand, when it is subject (by right or by option) to a simplified effective taxation arrangements, it may keep accounts simplified.

It must record from chronological manner transactions (purchases, sales, loans...) that affect its patrimony . It must also monitor the value of its assets and liabilities at most every 12 months through an inventory.

The business may keep its own accounts. On the other hand, when it decides to to entrust to a professional, it must address itself to a public accountant registered in the order :

The commercial business may also join an approved management organization which can assist it in its management (taxation, accounting, etc.). In that case, it must communicate its annual accounts to the approved management organization to which it accedes each year.

Warning  

In case willful omission in your billing (inaccurate or fictitious entries), the person who committed the omission could face a prison sentence of up to 5 years and €500,000 of fine.

The business shall establish the following accounting records:

  • Journal Book : The book in which all transactions that affect the business' balance sheet are recorded. Only receipts and payments are recorded daily, operation by operation. Debts and debts shall not be established until the end of the accounting year. However, overhead costs should be recorded at regular maturity every year at the most. The accounting entries can be centralized every 3 months.
  • Ledger : The book that collects all accounts. It reproduces the journal information by account and in the order of number provided by the General Chart of Accounts (GCP). Transactions are listed in chronological order.
  • Accounting Procedures Manual : A document that describes the accounting procedures and organization to understand the processing system and the performance of controls

Warning  

Where the business belongs to a group of businesses, it shall not benefit from the keeping of simplified accounts. It must record all the transactions that affect its assets every day (collection, payment, debt, fees...). In addition, it must centralize its accounting entries in the journal book every month.

Each book receives a identification number registered by a registrar. They must also be quoted and initialed.

Any accounting record shall specify origin, on content and the assignment to an account of each datum, and references the supporting evidence.

Books may be kept electronically with computer software or manually without blanks or alterations. They must be dated and registered from the moment the trader establishes them to guarantee their content.

Business that does not belong to a business group

Micro-company

The business is a micro-company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €450,000
  • Net sales amount less than or equal to €900,000
  • Average number of employees employed during the year up to 10

The business is a micro-company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €450,000
  • Net sales amount less than or equal to €900,000
  • Average number of employees employed during the year up to 10

At the end of each accounting year, it shall draw up its annual accounts. The annual accounts shall consist of a balance sheet, a profit and loss account, a management report and an annex.

The business is not obliged to draw up the notes on the accounts which normally comprise the annual accounts.

After drawing up its annual accounts, the business must file them online on the company formalities office or directly to the commercial court registry on paper. The Registry will then forward them for publication to the Bodacc.

For more information on the submission of annual accounts, see the fact sheet.

Small company

The business is a small company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €7,500 000
  • Net amount net of turnover less than or equal to €15 000 000
  • Average number of employees employed during the year 50 or less

The business is a small company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €7,500 000
  • Net amount net of turnover less than or equal to €15 000 000
  • Average number of employees employed during the year 50 or less

At the end of each accounting year it shall draw up its annual accounts. The annual accounts shall consist of a balance sheet, a profit and loss account, a management report and an annex. They may be presented in a simplified form (document template).

A business subject to the simplified business tax system shall have the possibility of presenting its annex in an abridged manner.

After drawing up its annual accounts, the business must file them online on the company formalities office or directly to the commercial court registry on paper. The Registry will then forward them for publication to the Bodacc.

For more information on the submission of annual accounts, see the fact sheet.

Average company

The business is an average company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €25 000 000
  • Net amount net of turnover less than or equal to €50 000 000
  • Average number of employees employed during the year up to 250

The business is an average company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €25 000 000
  • Net amount net of turnover less than or equal to €50 000 000
  • Average number of employees employed during the year up to 250

At the end of each accounting year, the business shall establish its annual accounts.

They shall consist of a balance sheet, a profit and loss account, a management report and an annex.

A business subject to the simplified business tax system shall have the possibility of presenting its annex in an abridged manner.

After drawing up its annual accounts, the business must file them online on the company formalities office or directly to the commercial court registry on paper. The Registry will then forward them for publication to the Bodacc.

For more information on the submission of annual accounts, see the fact sheet.

Business belonging to a business group

At the end of each financial year, the business must draw up its annual accounts. The annual accounts shall consist of a balance sheet, a profit and loss account, a management report and an annex. Where the business is the one controlling the group of businesses, it shall also establish consolidated accounts.

The business, once it has drawn up its annual and consolidated accounts (where necessary), shall submit them online on the website of the companies formalities window.

For more information on the filing of annual accounts, please consult the fact sheet on the subject.

The business shall keep its accounting records and supporting documents at least 10 years from the end of the accounting year.

Warning  

The retention of documents is necessary in case of control by the tax administration or in case of dispute. Businesses who fail to keep their documents may be fined €10,000.

Normal effective taxation system

The business is held to invoice for all its sales. All important billing information is described in the card “All about billing”.

Warning  

Failure to comply with the billing rules is punishable by a fine of up to €375,000. In the event of repeated infringement, the fine may be increased to €750,000.

A business business must keep records.

It must record from chronological manner transactions (purchases, sales, loans...) that affect its patrimony. It must also monitor the value of its assets and liabilities at most every 12 months through an inventory.

The business may keep its own accounts. On the other hand, when it decides to to entrust to a professional, it must obligatory contact a public accountant listed in the order's table:

The commercial business can also join an approved management organization (OGA) which can help it in its management (taxation, accounting...). Instead, it must communicate its annual accounts to the approved management organization to which it accedes each year.

Warning  

In case willful omission in your billing (inaccurate or fictitious entries), the person responsible may face a prison sentence of up to 5 years and €500,000 of fine.

The business shall establish the following accounting records:

  • Journal Book : The book in which all transactions that affect the company's balance sheet are recorded. Only receipts and payments are recorded daily, operation by operation. Debts and debts shall not be established until the end of the accounting year. On the other hand, overheads must be recorded at regular intervals no more than once a year.
  • Ledger : The book that collects all accounts. It reproduces the journal information by account and in the order of number provided by the General Chart of Accounts (GCP). Transactions are listed in chronological order.
  • Accounting Procedures Manual : A document that describes the accounting procedures and organization to understand the processing system and the performance of controls

Each book has a identification number. They must also be quoted and initialed.

Any accounting record shall specify origin, on content and the assignment to an account of each datum, and references the supporting evidence.

Books may be kept electronically with computer software or manually without blanks or alterations. They must be dated and registered from the moment the trader establishes them to guarantee their content.

Business that does not belong to a business group

Micro-company

The business is a micro-company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €450,000
  • Net sales amount less than or equal to €900,000
  • Average number of employees employed during the year up to 10

The business is a micro-company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €450,000
  • Net sales amount less than or equal to €900,000
  • Average number of employees employed during the year up to 10

At the end of each accounting year it shall draw up its annual accounts. The annual accounts shall consist of a balance sheet, a profit and loss account, a management report and an annex. They may be presented in a simplified form (document template).

After drawing up its annual accounts, the business must file them online on the company formalities office or directly to the commercial court registry on paper. The Registry will then forward them for publication to the Bodacc.

For more information on the filing of annual accounts, please consult the fact sheet on the subject.

Small company

The business is a small company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €7,500 000
  • Net amount net of turnover less than or equal to €15 000 000
  • Average number of employees employed during the year 50 or less

The business is a small company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €7,500 000
  • Net amount net of turnover less than or equal to €15 000 000
  • Average number of employees employed during the year 50 or less

At the end of each accounting year it shall draw up its annual accounts. The annual accounts shall consist of a balance sheet, a profit and loss account, a management report and an annex. They may be presented in a simplified form (document template).

After drawing up its annual accounts, the business must file them online on the company formalities office or directly to the commercial court registry on paper. The Registry will then forward them for publication to the Bodacc.

For more information on the filing of annual accounts, please consult the fact sheet on the subject.

Average company

The business is an average company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €25 000 000
  • Net amount net of turnover less than or equal to €50 000 000
  • Average number of employees employed during the year up to 250

The business is an average company if it fills 2 of the 3 criteria following:

  • Total balance less than or equal to €25 000 000
  • Net amount net of turnover less than or equal to €50 000 000
  • Average number of employees employed during the year up to 250

At the end of each accounting year it shall draw up its annual accounts. The annual accounts shall consist of a balance sheet, a profit and loss account, a management report and an annex. The company may present its income statement in a simplified form.

After drawing up its annual accounts, the business must file them online on the company formalities office or directly to the commercial court registry on paper. The Registry will then forward them for publication to the Bodacc.

For more information on the submission of annual accounts, see the fact sheet.

Business belonging to a business group

At the end of each financial year, the business must draw up its annual accounts.

The annual accounts shall consist of a balance sheet, a profit and loss account, a management report and an annex. Where the business controls the group of businesses, it must also draw up consolidated accounts.

The business, once it has drawn up its annual and consolidated accounts (only for the parent business), must deposit them online on the company formalities window.

For more information on the submission of annual accounts, see the fact sheet on the subject.

The business shall keep its accounting records and supporting documents at least 10 years.

Warning  

The retention of documents is necessary in case of control by the tax administration or in case of dispute. Businesses who fail to keep their documents may be fined €10,000.