Preparing annual accounts as an SME: this is what they must include

As an SME entrepreneur with a BV, you are legally required to prepare annual accounts every year and to file them with the Chamber of Commerce. What exactly they must contain depends largely on the size of your business. In this article you can read which parts are mandatory, which deadlines apply and what to look out for.

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Why annual accounts are mandatory

Annual accounts are the financial report of your business over the past financial year. They give insight into your financial position and are essential for your tax return, for financing and for accountability towards shareholders or financiers. Banks and lenders ask for them as standard for a loan or credit application.

Do you have a BV, NV or cooperative? Then you are legally required to file the annual accounts with the KVK every year. This filing obligation does not apply to sole proprietorships, although it is also wise for a freelancer to keep good records of the figures for the income tax return.

The three mandatory parts

Regardless of the size of your business, annual accounts always consist of three core documents:

• The balance sheet : a snapshot of your assets and liabilities, usually as at 31 December.
• The profit and loss account : an overview of all income and expenses over the financial year, concluded with the profit made or the loss incurred.
• The notes : an explanatory note to the balance sheet and the profit and loss account. How extensive it must be depends on the size of your business.

The scope and depth of each part differ per category. That is why the first thing you need to know is which size class your business falls into.

Size classes and what they mean for your annual accounts

The KVK uses four categories: micro, small, medium-sized and large. The classification is based on three criteria: the balance sheet total, the net turnover and the average number of employees. You fall into a category when you meet at least two of the three criteria for two consecutive financial years.

For most SME entrepreneurs in Eindhoven and the surrounding area, the micro and small categories are the most relevant:

• Micro company: net turnover up to around € 900,000, balance sheet total up to around € 450,000 and an average of no more than 10 employees. You may suffice with a highly simplified balance sheet and profit and loss account. Extensive notes are not mandatory; a brief statement of the accounting principles used is sufficient. There is no mandatory audit.
• Small company: net turnover up to around € 12 million, balance sheet total up to around € 6 million and an average of no more than 50 employees. You prepare an abridged balance sheet with limited notes and distinguish between fixed and current assets. An audit is not mandatory.
• Medium-sized and large companies: a more extensive balance sheet and profit and loss account, a full management report and a mandatory audit.

Note: the transition from small to medium-sized has major consequences for your reporting obligations and can also bring an audit requirement. Keep an eye on this in good time.

Deadlines for preparing and filing

Two separate legal obligations apply to the annual accounts, each with its own deadlines. It is good to keep them apart:

• Preparing: the board of the BV must have prepared the annual accounts within five months after the end of the financial year. In special circumstances, the shareholders can extend this period by up to five months, giving you a maximum of ten months in total.
• Adopting: after the annual accounts have been prepared, the shareholders have two months to adopt them. If all shareholders are also directors, the annual accounts are adopted as soon as they have all signed them.
• Filing: the adopted annual accounts must be submitted to the KVK within eight days. For all legal forms, the absolute deadline is no later than twelve months after the end of the financial year. Postponing the filing is not legally possible.

If you miss the deadlines, you risk a fine and possibly even personal liability as a director in the event of bankruptcy. So put the deadlines in your calendar.

Digital filing via SBR is mandatory

From financial year 2025 (so for annual accounts you submit in 2026), all legal entities must file their annual accounts digitally with the KVK Trade Register on the basis of Standard Business Reporting (SBR). This means that not all bookkeeping or administration software is automatically suitable for this. Check in good time whether your package meets this requirement, or bring in an adviser to arrange it for you.

Practical tips for correct annual accounts

• Keep your Administration Eindhoven up to date all year, so you don't run into surprises at the end of the financial year.
• Check every year which size class you fall into; growing turnover or more staff can significantly increase your obligations.
• Distinguish between the commercial annual accounts (for the KVK, bank and shareholders) and the tax base (for the corporate income tax return).
• Make sure the annual accounts are adopted before the filing date; you must also file annual accounts that have not been adopted to avoid committing an offence.
• Keep all supporting documents, such as invoices, bank statements and contracts, for at least seven years.
• Ask in good time for tax advice if you are unsure about the valuation of assets, provisions or tax reserves in the annual accounts.

Annual accounts and the corporate income tax return

Annual accounts are not the same as your tax return. The figures from the annual accounts do, however, form the basis for your corporate income tax return. Based on the commercial figures, you calculate the taxable profit, on which the corporate income tax due is then determined. Small differences between the commercial and tax valuation, such as depreciation or provisions, can play a role. Have this calculated properly to avoid discussions with the Dutch Tax Administration.

Why Belastingadviseur Eindhoven

At Belastingadviseur Eindhoven, we know that for many entrepreneurs annual accounts are more than a legal formality. They are also a moment to really understand your figures and see whether your business is financially on track. We help SMEs and director-shareholders in Eindhoven and the region prepare correct annual accounts, file them with the KVK on time and link them to the corporate income tax return. Do you have questions about your specific situation? Feel free to contact us, we are happy to think along with you.

We are happy to think along with you. For advice tailored to your situation we would gladly sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.

RoyBusiness adviser · Belastingadviseur EindhovenRoy is a business adviser at Belastingadviseur Eindhoven. He helps entrepreneurs in Eindhoven and the surrounding area with their administration, tax returns and tax questions, from VAT and annual accounts to converting a sole proprietorship into a BV. With a fixed monthly fee and personal contact, he makes sure your figures are always correct and up to date.About us·Read our Google reviews