Amendments to the Act on Accounting applicable from 1 January 2022

Electronisation of accounting

The most significant amendment covers electronisation of accounting and accounting records. The Act aims to react to overall trends in economy and the rising share of electronic accounting records in practise.

Wording of paragraph 31 (Accounting Record), paragraph 32 (Provability of Accounting Record) and paragraph 33 (Transfer of Accounting Record, from 1. January 2022 Transformation of Accounting Record) was amended.

Paragraph 31 specifies a definition of an electronic accounting record, and it determines the requirements for authenticity of origin, integrity of the content and legibility of an accounting record. Sending of documents in an electronic form must be performed either under a written agreement among the participating parties or based on the confirmed consent of a recipient of an accounting record which may also be, for example, the information on payment of the required amount.

An accounting entity shall be obliged to submit accounting records in the form in which it keeps and maintains them upon request of either a tax authority or for the needs of verification of the financial statements by an auditor. The accounting entity charging in the double-entry bookkeeping system shall be obliged to allow the tax authority and the other authorized entities to access the bookkeeping software for keeping accounts and to prove through the accounting record designation of the accounts to which accounting transactions are charged. (in this regard, from 1 January 2022, subpar. g) which addresses one of the obligatory requirements of an accounting document: “designation of accounts on which the accounting transaction is being accounted in accounting entities charging in the double-entry bookkeeping, unless it results from the software” is omitted from paragraph 10)

In paragraph 32 which addresses provability of an accounting record, a signing record is defined which may be a handwritten signature, a qualified electronic signature or a similar provable signing record substituting a handwritten signature in electronic form while unambiguous provable identification of a person who made this record is important.

However, an accounting document need not contain a signature of a person responsible for its accounting (amendment of paragraph 10 subpar. f) ).

Paragraph 33 addresses the transformation of an accounting record while it might be a change from the documentary form to electronic form or vice versa the change from electronic form to documentary form. During this transformation it is inevitable to maintain integrity of the content of an accounting record. Concurrently, we would like to point out that in compliance with the selected method of accounting record keeping only one transformation is possible while an accounting entity shall be obliged to keep an accounting record in the form which is a result of the accounting record transformation.

An accounting entity which decides to keep accounting records in a documentary form may do so either by a guaranteed conversion or if such record does not contain a qualified electronic signature or a qualified electronic seal, it may simply print it while ensuring credibility and legibility of an accounting record. If an accounting entity may carry out transformation from the documentary form into electronic form either through guaranteed conversion or by scanning into the file format in the raster graphic form (e.g. a picture saved in the .pdf, .png, .jpg, .tiff formats) while at least completeness, contentual and visual compliance with its original form, legibility of the entire area in a new form and, of course, integrity of the accounting record content must be preserved.

After transformation no submission of an accounting record in the original form is required unless special regulations stipulate otherwise.

Since the possibility of keeping the accounting documentation was extended by electronic form, a vaster amendment of paragraph 35 which regulates keeping and protection of the accounting documentation was carried out. It defines that electronic keeping of the accounting documentation means keeping the documentation on a data medium.  

Moreover, prior to its dissolution without a legal successor or prior to business termination, an accounting entity shall be obliged to inform the tax authority on providing for keeping its accounting documentation with provision of accurate identification data of the accounting entity or a natural person which will keep this documentation for a period of 10 years. In case of death of a natural person-entrepreneur, the obligation to inform the tax authority on providing for keeping the accounting documentation passes to a successor which shall be obliged to provide this information to the tax authority within 3 months from the date of the resolution on heritage coming into force.

Natural persons which are accounting units

Following the amendment of the Commercial Code, from 1 January 2020, natural persons are not registered in the Commercial Register what is also related to the obligation of the natural person to maintain double-entry bookkeeping. Foreign natural persons and Slovak natural persons are an accounting entity only if they prove their expenditures incurred to achieve, secure, and maintain income for the purposes of finding out the income tax base.

The personal scope of the Act is being extended by other persons than accounting entities if the selected obligations laid down in the Act for them (keeping of documentation, storage of documents) arise. The aim is to improve accessibility of the accounting documentation of the accounting entity which was dissolved or wound up the business.

Natural persons are omitted from the provision on size class breakdown.

Sanctions in case of obligation non-fulfilment

Furthermore, sanctions for infringement of the Act were updated in the amendment of the Act on Accounting while the lower limit for the breach of discipline caused by the accounting entity was set to the amount of EUR 1,000.00 (up to 31 December 2021 only upper limit is determined) and, concurrently, a sanction was determined (from EUR 100 to EUR 10,000.00) in case of infringement of the provision for depositing the deeds in the registry as well as the sanction (from EUR 100 to EUR 100,000.00) for infringement of  paragraph 35 which addresses protection of the accounting documentation. Moreover, sanctions for natural persons were determined in case of infringement of keeping the accounting documentation and depositing in the registry in the amount of EUR 100 to EUR 100,000.00.

Physical inventory of stock

From 1 January 2022, a possibility of conducting physical inventory of stock was extended which according to the new rules can be performed not only during the accounting period but in the first month of the following the accounting period.

Annual report of non-profit organizations

The amendment of the Act on Accounting specifies the requirements for the annual report of non-profit organizations which due to income of 2% amounting to more than EUR 35,000.00 shall be obliged to prepare it and, furthermore, the requirements of the annual report by public administration entities are supplemented.

Public part of the Registry of Financial Statements

From 1 January 2022, a public part of the Registry of Financial Statements is being extended by further two forms of legal persons (i.e. landowner associations and non-governmental non-profit organizations, civic associations, residential and non-residential property owners associations, interest associations of legal persons etc.), thus imposing an obligation on all legal persons to deposit documents in the public part of the registry. The non-public part of the registry will thus include only natural persons and establishments of foreign persons. According to new rules, all accounting documents must be deposited in the register only electronically. If a form is developed for the structured form or either financial statements or another accounting document, it will be impossible to deposit an accounting document as an attachment to the submission.

Company in crisis

Paragraph 28 is supplemented by paragraph 6 which addresses prohibition to return what was received what substitutes own resources if the company is in crisis pursuant to paragraph 67a of the Commercial Code. It defines that equity is not only an item of equity recognized in the balance sheet of the financial statements but also the amount which would be recognized if an accounting entity prepared the financial statements. Moreover, it specifies that liabilities are an item of liabilities recognized in the balance sheet of the accounting entity after deduction of accruals and deferrals (pertains to the micro accounting unit).