Consequences of not submitting the financial statement on time

Consequences of not submitting the financial statement on time have been defined in numerous legal acts. The most important one is the Accounting Act of 29 September 1994. Another crucial legal basis is the Penal Fiscal Code. They indicate adequate sanctions for not submitting financial statement. An entity obliged to submit a financial statement that has failed to do it may be subject to compulsory proceedings. What are the consequences of not submitting the financial report on time? We provide answers to these questions in the article below.

Table of Contents

• Financial statement – basic information
• Financial statement – obligation to submit it to the court register
• Consequences of not submitting the financial statement on time – criminal liability
• Consequences of not submitting the financial statement on time – fiscal penal liability
• Consequences of not submitting the financial statement on time – compulsory proceedings
• Consequences of failure to submit financial statements on time – ex officio dissolution of an entity entered into the National Court Register
• Consequences of not submitting the financial statement on time. Summary

Financial statement – basic information

A financial statement is a structured presentation of the financial situation of a given economic entity. It relates to the financial year and is prepared on the so-called balance sheet date. It has to meet the formal requirements specified in the provisions of the Accounting Act.

It consists of following sections:

1. Balance sheet. It shows the assets and liabilities as of the end of the current and previous financial year.
2. Profit and loss account. It separately presents revenues, costs, profits, and losses. It also presents obligatory charges to the financial result for the current and previous fiscal years.
3. Additional information. It includes an introduction to the financial statement and additional information as well as explanations.

The obligation to submit a financial statement applies to:

• Entities required to keep accounting books in accordance with the Accounting Act
• Entities that have chosen full bookkeeping as their method of record-keeping.

 Preparing a financial statement is the responsibility of the respective entity’s manager.

Financial statement – obligation to submit it to the court register

According to the provisions of the Accounting Act, the manager of an entity submits the following to the relevant court register:

• Annual financial statement,
• Audit statement, if the entity was subject to an audit,
• Extract of the resolution or decision of the authorised body approving the annual financial statement and determining the distribution of profit or coverage of loss,
• Activity statement, in the case of entities referred to in Article 49(1) of the Accounting Act

within 15 days from the date of approval of the annual financial statement.

The annual financial statement is approved by no later than 6 months from the balance sheet date.

Since 2018, the financial statement is submitted to the National Court Register only electronically. It must comply with the structure and format approved by the Ministry of Finance. The statement is signed with an electronic signature, trusted profile, or personal signature.

Consequences of not submitting the financial statement on time – criminal liability

According to the Accounting Act, anyone who fails to submit a financial statement is subject to a fine or restriction of liberty.

As it results from the Penal Code, the fine is determined in daily rates. The number of rates and the amount of a single rate must be specified. If the Penal Code does not state otherwise, the minimum number of rates is 10, and the maximum is 540. The daily rate cannot be lower than 10 PLN or exceed 2 000 PLN. In turn, the penalty of restriction of liberty lasts the shortest 1 month and the longest 2 years. It is imposed in months and years.

Criminal liability under the Accounting Act’s provisions depends on a given case’s circumstances.

Consequences of not submitting the financial statement on time – fiscal penal liability

According to the Fiscal Penal Code, anyone who fails to submit a financial statement to the competent tax authority within the specified deadline is subject to a fine for a fiscal offence. The fine is determined in a specific amount and can range from one-tenth to twenty times the minimum wage.

From 1 January 2023, until 30 June 2023, the fine for a fiscal offence ranges from 349 PLN to 69 800 PLN. From 1 July 2023 onwards, it will be increased to a range of 360 PLN to 72 000 PLN.

Consequences of not submitting the financial statement on time – compulsory proceedings

If the registry court determines that:

• An application for entry into the National Court Register or
• Obligatory documents that must be submitted

have not been filed despite the expiry of the deadline, the court summons the obligated parties to complete the documentation. The court sets an additional 7-day period for that (compulsory proceedings).

The court issues these summons under the pain of imposing a fine resulting from the provisions of the Code of Civil Procedure on the enforcement of non-pecuniary benefits.

The provisions state that:

• in one proceeding, the court may impose a fine not exceeding 15 000 PLN, unless imposing a fine twice proved to be ineffective,
• the total amount of fines in the same case may not exceed 1 000 000 PLN
• if the debtor fulfils the obligation or the proceedings are discontinued, the fines not paid by that time are remitted.

In the event of failure to perform the obligation on time, the registry court imposes a fine on the obligated parties. The registry court may repeat the fine.

Consequences of failure to submit financial statements on time – ex officio dissolution of an entity entered into the National Court Register

When the annual financial statements for two consecutive financial years are not submitted despite the summons, the registry court initiates ex officio proceedings for the dissolution of the entity registered in the National Court Register without conducting a liquidation procedure.

The registry court notifies the entity registered in the KRS about the initiation of the proceedings.

At the same time, it calls the entity to demonstrate within 14 days from the date of delivery of the summons that it :

• Actually conducts business activity
• Possesses assets, with an indication of their components

The notification includes a warning about the consequences of not responding to the court’s summons.

The registry court announces the initiation of dissolution proceedings without a liquidation procedure.

If the court determines that the registered entity doesn’t possess any marketable assets and doesn’t actually conduct business activity, the court:

• Decides on the dissolution of the entity without conducting a liquidation procedure,
• Orders its removal from the KRS.

Consequences of not submitting the financial statement on time. Summary

A financial report contains basic information about a company’s annual financial performance. The Accounting Act determines the components of the report. It also specifies deadlines for carrying out specific activities related to the financial report. Failure to submit the financial report on time results in numerous sanctions. These include fines, imprisonment, compulsory proceedings, or the dissolution and removal of the entity from the National Court Register.

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