Keeping accounts must also comply with your country´s legislation on VAT,
Sales Tax and other settlement.
When you are running a company you must keep annual accounts providing information on all financial activities in your firm.
Annual accounts must be kept in such a way that it is clear to the Tax Administration how you have reached the figure for the profit of your firm.
Being a sole trader you obviously have to pay income tax on your profit.
This is how you make the annual accounts:
Total sales of the year / turnover
- Less the company’s total expenses
= The company’s profit, which is your wage.
Companies are also liable to tax, although the calculation differs from that of an ordinary taxpayer’s.
If you have proper accounts you can retrieve proper financial statements.
If you just work on stuff that you like and you’re passionate about, you don’t have to have a master plan with how things will play out.
– Mark Zuckerberg, Facebook Founder and CEO