Guide: Business Income Certificates For Your Schengen Visa

What Is A Business Income Certificate For Your Schengen Visa Application?

A ‘Business Income Certificate’ (Income Statement or Profit and Loss Statement) is the summary of a company’s overall profit and loss during a specific period. The income certificates record all types of revenues generated by a company during this period. 

In other words, an income certificate is a financial statement that details a company’s profitability over a specific period. Income certificates are one of the three major financial statements, together with the balance sheet and the cash flow statement. 

We recommend you submit your business income certificates that cover at least the previous year – in case you own a company in your country of residence and you are applying for a Visa to travel to the Schengen Territory. 

These documents are not mandatory Schengen Visa requirements for all Embassies/Consulates, but even for the Missions that consider them optional, they can add value to your application. 

As a general rule, two types of business income certificates are available:

  1. The certificates are useful to determine their companies’ profitability
  1. The income certificates that the law requires them to fill out once a year are simply not enough to help them get an overall picture of their companies’ profit and loss. 

Sometimes, they also create internal income certificates because the standard income certificate form required to fill out does not contain enough relevant details to report the overall results of the business financial performance. 

For example, some standard mandatory income certificate forms have only a few sections where business owners can add the gross and net profit. However, they do not include a more detailed list of the company’s expenses and revenue sources. 

The rules mentioned above do not apply to all countries as the governments of some states require business owners to fill out and file income certificates on a quarterly basis. 

As a result, business owners do not prepare additional income certificates as an internal report because the income certificates filled out once every three months are enough to help them determine their companies’ operating performance. 

What kind of income certificates should you submit for your Schengen Visa?

Even though the internal income certificates are not official required documents (just as the income certificates required by law), they can still add value to your Visa application. This is because the Embassy/Consulate officers are interested to know if your company is generating enough profit to determine your return from the Schengen Area to continue running your business. 

Note: If you are not a citizen of the country where you are running your business but a temporary or permanent resident, you must also submit a copy of your residence permit – if applicable. 

Important: If you are running a business, please note that you must also submit your Company Registration Certificate (your company’s ‘birth certificate’ that shows relevant details about your business incorporation), your Company Tax Return, and business bank statements

The Importance Of The Business Income Certificates For Your Schengen Visa

For a business, income certificates are extremely important as they help determine the operating performance over a specific period of time (by analysing revenues and expenses).

Income certificates help a business owner track the sales figure (total amount of revenue generated by a business), costs of goods sold (the costs related to making or acquiring the products), gross profit, operating expenses (e.g., payroll, advertising, rent, utilities, and other overhead costs), and more. 

Your business income certificates are important for your Schengen Visa because they bring additional proof of your company’s profitability. 

The Visa officers are not accountants or tax agents. Therefore, they might not spend a lot of time analysing every single detail on your business income certificates. 

However, they are interested in checking your company’s profitability because a growing business that generates revenue will help them determine:

It doesn’t matter the short stay Schengen Visa type you are applying for (e.g., Schengen tourist Visa, business Visa, etc.). Proving your rootedness and your financial ability to cover your expenses is a mandatory Schengen Visa requirement. 

How To Get A Business Income Certificate For Your Schengen Visa

You should already have the income certificates that the law requires you to fill out and file at specific intervals together with your business accounting documents.

If you have an accountant, for sure they can provide you with copies of your business income certificates to submit them to the Embassy/Consulate/Visa ApplicationCentre. 

If you do not have an accountant and have lost or misplaced your official income certificates, you should contact the government agency where you filed them and request new copies. 

If you have an account created on the agency’s online portal, you may be able to download them by logging in to your account using your credentials. 

Suppose you do not create internal income certificates (and you just file an income certificate application form once a year as required by your country’s law). In that case, you can also use the instructions below and create internal income certificates for your Visa application. 

We also recommend you complete them regardless of your Visa application as they are important documents that help you calculate your business income). 

If you have an accountant, ask them to prepare the internal income certificates for your Visa application. Or, if you do it yourself, you can follow the steps below:

  1. Pick a reporting period (income certificates on a quarterly basis are the most appropriate for your Visa application)
  1. Print out a trial balance report corresponding to the period that your income certificates will cover
  1. Calculate your business total revenue for the reporting period
  1. Determine the costs of the goods sold (all the expenses necessary for you to provide the products or services you sell – e.g., labour costs, overhead expenses, etc.) 
  1. Calculate the Gross Margin. We remind you that ‘Gross Margin = Revenue – Costs of goods sold’. Or, if you want to calculate the Gross Margin as a percentage, you can apply the following formula: ‘Gross Margin = (Total Revenue – Cost of Goods Sold)/Total Revenue x 100’.
  1. Add the operating expenses (e.g., selling and administrative expenses)
  1. Calculate your total income prior to paying all taxes
  1. Add income taxes (according to the Corporate Income Tax in the country where you are running your business)
  1. Determine your business net income. The formula for calculating net income is ‘Revenue – Cost of Goods Sold – Expenses = Net Income’. Or, ‘Gross income – Expenses = Net Income’. 
  1. Give your business income certificate a veneer of authenticity by adding your business details (you can print it off on a letter-headed paper containing your company’s logo). You can also stamp and sign it. 

Important – To create internal business income certificates for your tourist or business Schengen Visa, you can also download our templates, print them off on a letter-headed paper showing your company’s details, and then fill them out. 

Or, you can use our templates if you already have internal business income  in the language of your country of residence (please note that most Embassies accept documents in English and in the official language of the Schengen Country they represent).

Common Mistakes To Avoid When Submitting A Business Income Certificate For Your Schengen Visa

There are two mistakes we recommend you avoid making when submitting your company income certificates:

The main detail that the Embassy/Consulate officers are interested in is your net profit (because a company that is generating revenue and has growth opportunities can be a valid reason for you to return to your country of residence). Also, a company generating revenue gives you the financial ability to cover all of your expenses for your trip. 

As a Schengen Visa applicant, you must prove that you have sufficient funds to cover your trip costs. 

As a business owner and Visa applicant, you are required to submit a list of documents that prove your company’s financial health. Make sure all of these documents show consistency. 

The details on your income certificates must match the details on your Company Tax Return and company bank statements. 

A lack of consistency between them may raise some red flags (e.g., a specific amount of money appears as ‘bank charges expenses’ on your income certificates, but this amount does not appear on your company bank statements. Or, the deductible expenses on your Company Tax Return do not match the deductible expenses on your income certificates).