Financial Crime World

Belgium Adheres to EU Financial Reporting and Auditing Standards

As a member of the European Union, Belgium is obligated to comply with the accounting, audit, and financial reporting requirements set forth by EU decrees and directives, which are incorporated into national laws and regulations. The country has successfully aligned its legal framework with the EU’s acquis communautaire in these areas.

Accounting Requirements

All Belgian companies must submit annual financial statements, including:

  • A balance sheet
  • A profit and loss statement
  • Notes to financial statements

According to the format prescribed by the National Bank of Belgium (NBB) and the Central Balance Sheet Office. Micro, small, and large enterprises are required to maintain a complete set of books of accounts in accordance with Article 3.84 of the Code of Economic Law.

Books of Accounts

The complete set of books of accounts includes:

  • General ledgers
  • Subsidiary ledgers (e.g., sales ledgers, purchase ledgers, cash books)
  • Inventory book (annual inventory of assets and liabilities)

Belgian Generally Accepted Accounting Principles (GAAP) are outlined in the Royal Decree of 29 April 2019 and apply to all companies’ compulsory annual accounts.

Financial Statements

Certain types of legal entities are required to file financial statements, including:

  • Private limited companies (SPRL/BVBA)
  • Public limited companies (SA/NV)
  • Limited liability joint-stock companies (VO)
  • Credit institutions

Consolidated financial statements must be prepared in accordance with Belgian GAAP, unless a company is exempted by the Royal Decree of 18 January 2005 or meets specific thresholds.

Deadlines and Penalties

The deadline for approving and filing annual accounts is typically the day before the first day of the ninth month after the end of the financial year. Late filing can result in fines ranging from €120 to €1,200, depending on the company’s size and the duration of the delay.

Tax returns must be filed within six months of the end of the financial year, but deadlines may be extended upon request. Failure to meet these deadlines can lead to tax assessments and penalties.

Recent Developments

In recent years, the deadline for filing a profit tax return has been regularly postponed. The current deadline for corporate tax returns is June 30, 2021, but changes are possible.

Consolidated Financial Statements

Consolidated financial statements must be prepared in accordance with Belgian GAAP unless a company meets specific thresholds or is exempted by the Royal Decree of 18 January 2005. Listed companies, credit institutions, insurance companies, and investment firms are required to publish their consolidated financial statements according to IFRS.

Conclusion

The article highlights Belgium’s adherence to EU financial reporting and auditing standards, emphasizing the importance of meeting deadlines and complying with regulations to avoid fines and penalties. It also provides an overview of the country’s accounting requirements, including the preparation of annual financial statements, inventory, and books of accounts.