Size criteria for enterprises: the impact on tax rates and filing annual accounts
April 2023 – In our country, a company's size criteria are used to determine tax rates and filing of financial statements, among other things.
The size of your enterprise is determined on the basis of three criteria: annual turnover, balance sheet total and number of employees. Depending on these criteria, an enterprise is classified into one of the following categories: micro, small, medium or large enterprise.
Do you have a micro or small enterprise? Then, as a manager, you enjoy lower tax rates and have to deal with less stringent rules for filing annual accounts.
In mid-March 2022, the Accounting Standards Commission (CBN) published a new version of its advice on the criteria that a small company should meet.
A company that does not exceed more than one of the following criteria on the balance sheet date of the last completed financial year qualifies as a small company:
Annual average number of employees: 50
Annual turnover (excluding VAT): 9,000,000 euro
Balance sheet total: 4,500,000 euro
The micro company is a subcategory of the small company. This is a small company that is not a subsidiary or parent company on the balance sheet date and does not exceed more than one of the following criteria:
Annual average number of employees: 10
Annual turnover (excluding VAT): 700,000 euro
Balance sheet total: 350,000 euro
Medium-sized and large companies
generally have higher tax rates and must comply with stricter rules for filing annual accounts.
As regards the filing of annual accounts, as a micro or small enterprise you may file simplified annual accounts, while medium-sized and large enterprises must file full annual accounts.
