Accounting law is based on the Commercial Code and the Law on commercial companies.
Business owners must:
- keep accounts covering their business activities;
- prepare a complete annual inventory of assets, rights, debts, obligations and commitments;
- adopt an abbreviated outline of accounts (certain businesses);
- write a management report presenting the accounts;
- write a report on the annual audit of accounts (for businesses exceeding the criteria of the abbreviated outline);
- submit annual accounts approved by the shareholders' meeting to the Trade and Companies Register;
- retain accounting documents for 10 years.
Individuals not domiciled in Luxembourg and companies with a registered office abroad are not subject to the Code as regards the branches and operating headquarters they set up in Luxembourg.
Law on commercial companies
Public limited companies must:
- prepare an annual inventory of assets, debts, obligations and commitments;
- record depreciation in the accounts ;
- present the balance sheet and income statement (profit and loss account).
The law also regulates company accounts.
Accounting law has four major principles (basic, recording accounting events, evaluating net assets and financial structure, and annual information), which form the basis of company financial statements.
Since 2005, listed companies within the EU have been required to comply with the IFRS (International Financial Reporting Standards), defined by the International Accounting Standards Board. Other companies in Luxembourg are free to apply these or adopt other standards.
The Centre de formalités (Chamber of Trades) and the Espace entreprises (Chamber of Commerce) provide help with formalities and administrative procedures.
The Guichet entreprises business portal provides online forms.
Companies are required to submit their annual accounts to the Trade and Companies Register (Registre de Commerce et des Sociétés - RCS) and to record in the Mémorial of the Grand Duchy of Luxembourg that this has been done.
The annual accounts have to be submitted in the month following approval, i.e. no later than six months after the end:
- of the calendar year for individual traders;
- the financial year for legal entities.
Submission and publication
For reasons of transparency and protection against third parties, it is possible to view the annual accounts of companies by applying to the RCS.
The invoice is a crucial element in relation to accounting and taxation. It constitutes a supporting document for the account books and is the basis for calculating the VAT to be deducted or paid.
To be valid, the invoice has to include a number of mandatory details, and must be issued within defined deadlines.
The Guichet entreprises business portal provides information on company accounts.