At the end of the year, organizations and individual entrepreneurs are required to submit an annual financial report that summarizes their financial activity. While this process may seem complex and time-consuming, with proper organization it becomes predictable and manageable.
In this article, we provide a step-by-step guide on how to prepare an annual financial report in Armenia.
What Is an Annual Financial Report and Why Is It Mandatory?
The annual financial report includes a complete summary of the financial operations of the given year, including:
Income
Expenses
Tax liabilities
Status of assets and property
This report is mandatory for:
LLCs, JSCs, and other legal entities
Self-employed individuals and private entrepreneurs (PEs) — in a simplified form
Submission to tax authorities and the State Register of Legal Entities
Step-by-Step: How to Prepare the Annual Report
1. Gather the Necessary Financial Data
You first need to collect complete and accurate data on:
Total annual turnover of the company
Expenses by category (e.g., salaries, purchases, rent)
Tax payments
Property, liabilities, and cash balance
Use accounting software or Excel spreadsheets to organize the data.
Compile the Financial Statement Package
A typical financial report package includes:
Profit & Loss Statement
Balance Sheet
Cash Flow Statement
If the business is small, a shortened version may be submitted in accordance with Armenian legislation.
Calculate Taxes and Social Contributions
Make sure to calculate:
Income tax
Corporate tax or turnover tax
VAT (if you are a VAT payer)
Social payments for employees
If the amount paid exceeds the calculated amount, you may be eligible for a refund.
Fill Out and Submit Tax Reports
Use the efiling.taxservice.am online platform to submit the required forms:
Annual income tax report
Financial statements (if required for your type of organization)
The deadline is usually March 1 of the following year, but it’s recommended not to delay.
Submit the Report to the State Register
Legal entities are also required to submit the financial report to the State Register to officially summarize their annual activity.
Common Mistakes to Avoid
Mismatched data between turnover and tax calculations
Incorrect payroll entries
Missing the legal submission deadline
Inconsistencies between bank transactions and accounting records
Simplified Reporting for Private Entrepreneurs (PEs)
If you are a private entrepreneur or self-employed individual, your reporting requirements are significantly simplified:
A basic tax form
A few key indicators of business activity
Often completed in just a few minutes via the online platform
Conclusion
The annual financial report is a key part of business accountability.
It’s not only a legal obligation, but it also provides a clear overview of your financial status.
If you lack experience, it’s highly recommended to consult with a professional accountant to ensure the report is complete, accurate, and compliant with the law.