A SIA with three employees, EUR 120,000 in annual revenue, and a straightforward business model should not spend more than a few days on its annual report. Yet many owners treat the process like a mystery — stacking receipts in a shoebox and handing everything to an accountant in late April, hoping for the best. The result is rushed work, missed deductions, and sometimes a late filing penalty of up to EUR 600.

Preparing an annual report for a Latvian SIA is methodical, not mysterious. Here is exactly how it works, step by step.

Step 1: Close the Books for the Fiscal Year

Before any financial statement can be prepared, the accounting records for the reporting period must be complete and accurate.

Reconcile all bank accounts. Match every transaction in your accounting software to the bank statement. For most SIAs, this means one or two bank accounts. If you use multiple payment providers (PayPal, Stripe, Wise), reconcile those too — VID treats them as equivalent to bank accounts.

Record all December invoices. Revenue and expenses must be recognized in the period they belong to, not when cash moves. An invoice dated December 28 that you pay on January 5 belongs in the prior year's books. This is accrual accounting, and it is mandatory for SIAs in Latvia.

Calculate depreciation. Fixed assets — vehicles, equipment, office furniture — must be depreciated according to the rates set in your accounting policy. For tax purposes, Latvia uses specific categories with prescribed rates (e.g., computers: 70% maximum, vehicles: 20%).

Record provisions and accruals. Unused vacation days? Employee bonuses? Uncertain liabilities? These need to be estimated and recorded. In our experience, vacation accruals are the most commonly forgotten item — and VID auditors check for them.

Write off bad debts. If receivables are genuinely uncollectable, write them off. Document your attempts to collect (demand letters, communication records). Without documentation, VID may disallow the write-off.

Step 2: Prepare the Financial Statements

With the books closed, the financial statements are assembled. For a micro SIA (balance sheet ≤ EUR 350,000, revenue ≤ EUR 700,000, ≤ 10 employees — meeting two of three), the simplified format applies:

Abbreviated balance sheet. Assets on one side, equity and liabilities on the other. Micro companies can group line items more broadly than small or medium companies.

Abbreviated income statement. Revenue minus expenses, arriving at profit or loss. Micro companies do not need to break expenses into as many categories.

Minimal notes. At minimum: the accounting policies applied, any significant post-balance-sheet events, and guarantees or contingent liabilities. One paragraph each is typically sufficient for a micro company.

For small SIAs, the requirements expand: full balance sheet, full income statement, and more detailed notes including information about employees, related-party transactions, and off-balance-sheet arrangements.

All statements must be in Latvian and expressed in euros.

Step 3: Get It Audited (If You Must)

Most SIAs do not need an audit. The audit requirement kicks in when your company meets two of three thresholds: balance sheet total exceeding EUR 800,000, net revenue exceeding EUR 1,600,000, or more than 50 employees.

If you do need one, engage the auditor early — ideally in February. An audit firm needs four to eight weeks to complete their work, and waiting until April creates a bottleneck. Rush audits cost more and produce more questions.

The auditor issues one of four opinions: unqualified (clean), qualified, adverse, or a disclaimer. Banks and investors care deeply about this opinion. An unqualified opinion is what you want.

Step 4: Approve and Sign

The annual report must be approved by the company's shareholders (dalībnieki) before filing. For a single-member SIA, the sole shareholder signs a written decision approving the report. For multi-member companies, a shareholders' meeting must be held (or a written decision procedure used, as permitted under the Commercial Law).

The board member (valdes loceklis) then signs the report. If the SIA has multiple board members, the signatory arrangements depend on your articles of association — check whether one signature suffices or all are required.

Electronic signatures (eParaksts, eID, or Smart-ID via the relevant portal) are standard for electronic filing.

Step 5: File Electronically

With UR (Commercial Register): Log in to info.ur.gov.lv, navigate to the annual report submission section, upload the signed document, and pay the state fee (EUR 7.11 for electronic filing). The system will validate the submission and confirm receipt.

With VID: File through EDS (eds.vid.gov.lv). The annual CIT declaration is submitted separately but typically at the same time. Ensure the figures in your CIT return match the annual report — discrepancies trigger automatic queries from VID.

Deadline reminder: Micro and small SIAs file by April 30 (for calendar-year companies). Do not confuse this with the July 31 deadline that applies only to medium and large companies.

After filing, retain a digital copy of the submitted report, the UR confirmation, and the VID submission receipt. These serve as proof of timely compliance if any questions arise later.

Your Annual Report, Prepared and Filed Correctly

From trial balance review through UR and VID submission -- or just the components your team cannot handle in-house -- we prepare annual reports for SIAs at every size level. Clean books throughout the year make this process faster and cheaper.

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How to Prepare an Annual Report for SIA (Step-by-Step)