![\"Accounting](\"https:\/\/www.simplbooks.ee\/wp-content\/uploads\/2021\/01\/Accounting-in-Estonia-1.jpg\")
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In Estonia, the accounting entity is the state, a local government unit, any legal person in private or public law registered in Estonia, a sole proprietor or a branch of a foreign company registered in Estonia. The state organizes its accounting through state accounting entities (\u00a7 2. Accounting entity<\/a>). In short, we can say that all companies are accountable.<\/p>\n In Estonia, the accounting requirements of accounting entities are regulated by the Accounting Act. An accounting entity is required to perform accounting and financial reporting and document all its economic transactions, record all its economic transactions in accounting registers, prepare and submit annual reports and other financial statements pursuant to the procedure provided for in the Act above and other legislation, and maintain accounting records.<\/p>\n Accounting is performed on an accrual basis, i.e. economic transactions are recorded resulting from the occurrence of economic transactions, regardless of whether the money related to these transactions has been received or paid (\u00a7 5. Accrual based and cash based accounting<\/a>). Self-employed people can also do it on a cash basis. An economic transaction is a transaction entered into by an accounting entity or an event affecting it, or a transaction entered into between third parties, as a result of which the composition of the accounting entity\u2019s liabilities, assets or equity changes. The accounting entity is required to document and record such transactions within a reasonable time after the economic transactions have taken place. Within a reasonable time means that the timely submission of reports prescribed by legislation would be ensured (\u00a7 6. Documenting and recording business transactions<\/a>).<\/p>\n If you have started a business, you need to look at three main accounting documents: opening balance sheet, internal accounting rules and annual report. The opening balance sheet is a chart that shows the amount of equity, liabilities and assets before starting business. The opening balance sheet must be drawn up when the company is set up.<\/p>\n All accounting entities operating in Estonia (except micro-enterprises)<\/strong> must prepare internal accounting policy (\u00a7 11. Accounting policies and procedures<\/a>).<\/p>\n An internal accounting policy is a document that must reflect: Micro-enterprises do not have to submit internal accounting rules. A micro-enterprise is a private limited company whose indicators on the balance sheet date meet all the following criteria: total assets up to 175,000 euros, liabilities do not exceed equity, one shareholder who is also a member of the management board and whose sales revenue is up to 50,000 euros.<\/p>\n Every company is obliged to submit an annual report to the commercial register every year. The report shall be submitted annually within six months of the end of the financial year. In Estonia, the annual report can be prepared on the Enterprise Portal. In addition to the above, you must submit additional reports and declarations according to the form of business, structure and field of activity.<\/p>\n <\/p>\n Looking for accounting software for your business? Try SimplBooks! SimplBooks accounting software is simple enough for a small business owner. We offer a lot of functionality and automatic solutions in the software, all for an affordable monthly fee \u2013 the basic package is 14.90 \u20ac + VAT per month. We also provide customer support and user guides, and you can add an unlimited number of users to one company. Try SimplBooks 30 days for free!<\/a><\/strong><\/p>\n Microenterprise annual report in Estonia<\/a><\/p><\/blockquote>\nAccounting requirements in Estonia<\/h3>\n
Key accounting documents<\/h3>\n
\n\u2022\u00a0 chart of accounts with a description of the content of the accounts;
\n\u2022\u00a0 procedures for documenting and recording economic transactions;
\n\u2022\u00a0 turnover and storage of source documents;
\n\u2022\u00a0 keeping accounting records;
\n\u2022\u00a0 recognition of income and expenses in the income statement entries;
\n\u2022\u00a0 inventory of assets and liabilities;
\n\u2022 the accounting policies used by the accounting entity and the presentation of the information;
\n\u2022\u00a0 procedure for preparation of financial statements;
\n\u2022\u00a0 The use of computer software in accounting and matters related to the organization of accounting and the implementation of measures accompanying internal control.<\/p>\nAnnual report<\/h3>\n