The new Accounting Act, which should come into force on 1 January 2024, is still in the legislative process. Let us summarise in what phase the act and the related regulations are now.
The preparatory phase of the new Accounting Act was completed in October 2022, when the Ministry of Finance of the Czech Republic (MoF) submitted a draft of the new Accounting Act for comment. We have informed you about the main changes brought by the new Accounting Act in the article The Ministry of Finance published a draft of the new Accounting Act.
According to the information from the MoF, the internal and external comment procedure for the Accounting Act, including the settlement, was completed in March 2023. Unfortunately, it has not yet been made public which comments from the professional public or other ministries have been incorporated. At this point, the Ministry of Finance expects that the draft of the Accounting Act will be discussed by the government in July 2023, then head to the Chamber of Deputies and after that to the Senate.
Along with the draft of the Accounting Act, the outline of the implementing decrees was published in October 2022, but their final form is not yet known. The accounting standards to be issued at the same time as the Accounting Act have not yet been published and we have no information on the status of their preparation.
The Ministry of Finance is also preparing a so-called accompanying act amending and repealing certain acts in connection with the adoption of the new Accounting Act. The changes will affect more than 100 legal regulations in total, the vast majority of which will be changes in the terminology used. However, major substantive changes will be made to the Income Tax Act and the Asset Valuation Act. The most significant amendments to the Income Tax Act will concern the possibility of applying IFRS to determine the tax base, depreciation/amortisation of assets, etc.
The draft of the accompanying act should be ready by the end of April, and the internal and external comment procedure, including its settlement, should end in August. According to the MoF’s current schedule, the government should discuss the draft of the accompanying act in September 2023, after which it will be approved by the Chamber of Deputies and the Senate.
The proposed effective date of the entire package of changes (i.e. the new Accounting Act including the related decrees and the accompanying act) is 1 January 2024. Given the legislative deadlines and the need for the reporting entities to prepare for the implementation of changes, we assume that the effective date will be postponed to 1 January 2025.
We will keep you informed of further developments in this area. We are also planning seminars in autumn to discuss the main changes in the accounting and tax area.