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Luxembourg Companies Must Comply with Annual Accounts Filing Requirements

As of January 1, 2016, Luxembourg companies that close their financial year on December 31 must comply with new annual accounts filing requirements. Failure to do so may result in severe penalties, including civil and criminal liability for directors and even judicial dissolution of the company.

Approval and Filing Process

The approval and filing process involves six steps:

Step 1: Preparation of Annual Accounts

  • Companies must prepare their annual accounts, which include a balance sheet, profit and loss account, and notes to the accounts.

Step 2: Meeting of Shareholders

  • The meeting of shareholders must approve the annual accounts, which is usually done at the company’s general meeting.

Step 3: Deposit of Annual Accounts

  • The approved annual accounts must be deposited with the Luxembourg Trade and Companies Register (RCS).

Step 4: Publication of Annual Accounts

  • The annual accounts must be published in a newspaper or on the company’s website.

Step 5: Filing with Tax Authorities

  • The annual accounts must also be filed with the Luxembourg tax authorities.

Step 6: Consolidated Annual Accounts

  • If the company has subsidiaries, it must prepare consolidated annual accounts.

Recent Update of Provisions Applicable to Annual and Consolidated Accounts

The new law on annual accounts and consolidated accounts, which came into effect on January 1, 2016, transposes the provisions of the accounting directive 2013/34/EU. The law fully restates the applicable rules to annual and consolidated accounts, including the structure and contents of the balance sheet, profit and loss account, and notes to the accounts.

Potential Penalties for Non-Compliance

Companies that fail to comply with the approval and filing process may face severe penalties, including:

  • Civil liability for directors
  • Criminal liability for directors, including fines and prison sentences
  • Judicial dissolution of the company

Directors who fail to submit the annual accounts for approval within six months may also be jointly and severally liable towards the company and third parties.

Key Changes

The new law introduces significant changes to the approval and filing process, including:

  • New obligation for small-sized entities to disclose information concerning subsidiary companies
  • Increased thresholds to differentiate middle-size and large-size companies
  • Impact on the scope of requirement to prepare consolidated accounts

Companies must ensure that they comply with these new requirements to avoid severe penalties.