One Latvian SIA we took over as a client in 2025 had filed three consecutive annual reports using the micro company simplified format. The problem: their revenue had crossed EUR 800,000 two years earlier, pushing them into the small company category. UR eventually rejected the latest filing, VID opened a review, and the company spent four months — and roughly EUR 3,000 in additional accounting and legal fees — sorting out the mess. All because nobody rechecked the category thresholds.

This is mistake number one. Here are seven we see most often, along with what to do about each.

Mistake 1: Wrong Company Category

Every fiscal year, you must verify whether your SIA still fits its current category. The thresholds (micro: ≤ EUR 350,000 balance sheet, ≤ EUR 700,000 revenue, ≤ 10 employees; small: ≤ EUR 4,000,000 / ≤ EUR 8,000,000 / ≤ 50) are based on meeting two of three criteria.

If your company grew, you may have jumped a category — and the reporting requirements change accordingly. The fix is simple: check the numbers at year-end before preparing anything.

Mistake 2: Missing the Deadline

Micro and small companies must file by April 30 (for calendar-year fiscal years). Not May 1. Not "within a few days." April 30. Medium and large companies have until July 31.

The penalty for late filing reaches up to EUR 600, and if the report is more than eight months overdue, UR can initiate removal of the company from the register. We see this most often with dormant SIAs whose owners assume that "no activity means no filing obligation." It does not. Even a company with zero revenue must file.

Mistake 3: Forgetting Shareholder Approval

The annual report must be formally approved by the shareholders before filing. For a single-member SIA, this is a written decision signed by the sole dalībnieks. For multi-member companies, a shareholders' meeting (or written consent procedure) is required.

UR checks for this. An annual report filed without evidence of shareholder approval can be rejected or flagged. The solution: prepare the shareholder decision as part of your standard filing package, not as an afterthought.

Mistake 4: Unsigned or Improperly Signed Submissions

Electronic filings must be signed with a valid electronic signature — eParaksts, eID, or through the authorized representative's credentials. An unsigned submission gets automatically rejected by the UR portal.

A subtler version of this mistake: the person who signs is not actually authorized. If your company's board composition changed and the Commercial Register was not updated, the signatory on record may not match. Verify who has signing authority before filing day.

Mistake 5: Inconsistent Numbers Between UR and VID

The annual report filed with UR and the CIT declaration filed with VID must tell the same story. Revenue in the annual report should match revenue in the tax return. Profit figures should reconcile (with documented adjustments for items treated differently for accounting vs. tax purposes).

When VID detects discrepancies, they send queries. Queries consume time and, in our experience, make the company more likely to be selected for a desk audit. The prevention: have the same person (or team) prepare both documents, and cross-check before submitting.

Mistake 6: Filing in the Wrong Language

The annual report must be in Latvian. This seems obvious, but companies with foreign shareholders or international management teams sometimes prepare their internal financial statements in English and then submit those to UR. The submission will be rejected.

If you need English-language statements for investors or a parent company, prepare two versions: the official Latvian filing for UR/VID and an English translation for internal use.

Mistake 7: Poor Record Retention

Filing the report is not the end of your obligation. All supporting documents — journals, ledgers, invoices, bank statements, payroll records, contracts — must be retained for at least five years. Employment-related documents and real estate transaction records require ten years.

Companies that dispose of records too early face serious problems if VID initiates an audit. Without documentation, you cannot substantiate the figures in your annual report, and VID may assess additional taxes based on their own estimates — which are never in the taxpayer's favour.

The strongest protection: digital archiving. Scan everything, store it in the cloud (with proper backup), and maintain a clear filing structure by year and document type. Physical storage is allowed but vulnerable to fire, flood, and simple disorganization.

Catch Mistakes Before UR and VID Do

A quick pre-filing review by our team catches the errors that trigger rejection notices, penalty assessments, and audit triggers. We review annual reports for dozens of companies each year -- and the most expensive mistakes are always the ones that could have been caught with fresh eyes.

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7 Common Mistakes in Annual Reports (and How to Avoid Them)