The bookkeeping obligation implies registering financial transactions that have a direct impact on the business’ balance sheet and the profit and loss account. The regulations are supposed to ensure sound registration and documentation of the financial transactions, and thereby provide reliable financial information to the stakeholders. The financial information is crucial to the authorities’ tax and VAT calculations. Other users of the financial information are investors, shareholders, employees and creditors. Note that the information may be subjected to a review by the tax authorities.
What businesses are subject to the regulations in the Bookkeeping Act?
Businesses that are obliged to keep accounting records pursuant to the Accounting Act (1998) are always subjected to the regulations in the Bookkeeping Act. In addition, all businesses obliged to submit the VAT return and/or obliged to submit the self-employment income declaration need to follow these regulations. Furthermore, the Tax Office and the Central Office for Foreign Tax Affairs may impose the obligation to keep accounts (for 2 years) on legal entities suspected of conducting business activities.