With effect from 1 November 2015, Book 2 of the Civil Code (BW) will contain the micro-enterprise introduced. A micro-enterprise is granted extensive exemptions regarding the content of its annual accounts. This applies to both the inaugural annual accounts and the documents required for publication. Furthermore, a micro-enterprise’s abridged annual accounts may be prepared on the basis of tax accounting principles, in which case the disclosure of accruals and deferrals relating to other operating expenses may be omitted.
A business is classified as a micro-enterprise in a financial year in which it meets at least two of the following three criteria:
– the value of the assets does not exceed €350,000 (valued at cost);
– net turnover for the financial year does not exceed €700,000;
– the average number of employees during the financial year is fewer than 10.
These rules naturally apply only to legal entities (such as public limited companies (N.V.), private limited companies (B.V.) and co-operative associations). After all, Book 2 of the Dutch Civil Code applies only to legal entities.
Whether it is advisable for a micro-enterprise to prepare (or have prepared) its annual accounts depends on the purposes for which the accounts are being prepared. If the business owner and the tax authorities are the only users of the information, a limited set of annual accounts will generally suffice. However, if, for example, the bank and/or other stakeholders use the financial statements (or the information contained therein), it may be advisable to prepare (or have prepared) financial statements based on the more comprehensive standards.