Being a responsible subject in a company means holding a lot of responsibilities when it comes to reports that should be submitted to relevant institutions.

The reports refer to annual financial reports, that is, reports that are made once a year and cover the calendar period of one year (1.1. -31.12).

These reports are made with the purpose of creating profile of business activities on a certain date and determine tax dues on a generated profit. Of course, this is not the only reason, but certainly the most important one as far as relevant institutions are concerned.

The other reason is informative as it provides the owner and other interested parties an insight into business results as well as a relevant basis for making business decisions. Of course, when it comes to smaller scale entrepreneurship, entrepreneurs tend to follow their business activities in a different manner than it is done by big companies or corporations. While the latter utilize a developed system of keeping track and reporting on every aspect of business activities, smaller scale entrepreneurs rely in most cases on the amount of money they have on the account and how much money is with their buyers.

The third reason is statistical, and is used by some institutions in order to follow trends in the economy and then trading the received information by providing them to credit houses and banks who later on come up with products based on this information.

Profit taxpayers have an obligation to file a tax return at a Tax Administration Office until 30/4 in a current year for the previous year with attached documentation which usually consists of a gross balance sheet, POD-RDG (Profit and Loss Account Report) and POD-BIL forms (Balance Sheet Report), various statements, agreements etc. In 2017 the PD-IPO form (Report on Business Activities with Connected Parties) was introduced, which has to be submitted by anyone having transactions with connected companies (sales, purchase, giving or receiving loans).

Another report is an Annual Financial Report (AFR, in Croatian GFI) and it is submitted to the Financial Agency (until 30/4) for statistical reasons or for the purpose of being publicly available. They are usually submitted once for both purposes thus saving time. Attachments to the report are Notes, Decision on Determining the Annual Financial Report and the Decision on the Distribution of Profit or Covering Loss.

The fact is that both reports are very similar and the question is brought up why institutions do not enable sending only one report to a central register from which the information can then be distributed further?

These activities are mostly done by accountants, but it is good to know to whom and why are these reports submitted.

For those who wish to know more or have further questions do not hesitate to contact us by [email protected].