For some time now, we have been informing you about the preparations for the new Accounting Act and the related accompanying legislation, which, among other things, significantly amends the Income Tax Act. All of the laws under preparation have so far been proposed to take effect from 1 January 2025. As these proposals have not yet been submitted to the Chamber of Deputies for discussion and have not yet been approved by the Legislative Council of the Government, it is now certain that the proposed effective date will have to be postponed and the new Accounting Act (and other accompanying regulations) will not apply from 2025.
Current speculation suggests that the effective date may be postponed to 1 January 2026. However, this date presupposes that the proposed laws will be approved by the current Parliament of the Czech Republic. Given that there are approximately 180 laws currently under discussion in the Chamber of Deputies and less than a year remaining in the parliamentary term, this seems quite unrealistic.
Additionally, a crucial aspect for accounting practice must be considered: if the proposed laws are quickly approved, accounting entities and taxpayers would have only a limited time to prepare for the new regulations. It is essential to remember that these proposed changes are fundamental and will impact the majority of accounting entities and taxpayers. Implementing these changes may be quite challenging, as they could require significant modifications to accounting systems.
In summary, since it is unlikely that the current Chamber of Deputies will be able to discuss and approve the relevant norms—critical for the impact on the state budget—during its current term, and because entities need adequate time to prepare for the new legislation (we believe this should be at least 12 months from the promulgation of the laws in the Collection of Laws), we anticipate that the actual effectiveness of the laws is more likely to occur in 2027 or 2028.
Given the diminishing timeline for the new Accounting Act to come into effect, the next question is whether the Ministry of Finance will pursue partial amendments to the existing law in the meantime, similar to the approach taken with the introduction of the option to use a functional currency.
We will keep you updated on any further developments.
Do you want to know more? Read our other articles where we present the new accounting law or the changes contained in the companion act to the accounting act.
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