Accounting in the Czech Republic
- Accounting Standards
- The Czech accounting system is based on double-entry bookkeeping and is largely consistent with the systems of other European countries with certain minor difference regarding, for example, financial leasing or depreciation of fixed assets. Czech accounting rules are determined by the Ministry of Finance. They come from the National Accounting Standards. Czech Republic tries to get accounting rules in accordance with IAS, IFRS.
- Accounting Regulation Bodies
Ministry of Finance
- Accounting Law
- Act No. 563/1991 Coll. on Accounting (am. in 2004)
- Czech Accounting standars which are based on the 4th and 7th directives of EU and on IAS
- Act on Auditors am. in 2002
- Difference Between National and International Standards (IAS/IFRS)
- Companies that have issued securities traded on regulated stock exchanges in the EU member states should apply IFRS when preparing their annual financial statements and consolidated financial statements. However, for calculation of corporate income tax, the accounting result must be calculated based on the Czech Accounting Standards without the impact of the IFRS.
- Tax Year
- The Amendment to Law on Accountancy allows taxpayers to keep accounts in another fiscal period than the calendar year. The fiscal tax year must have 12 consecutive months.
- Accounting Reports
- Companies have to establish a balance sheet, a profit and loss account and annexes. Those accounts must be published in Czech, in CZK. More, companies obliged to have an audit must prepare the statement of cash flows and the statement of changes in equity. Corporations limited and societes listed on Stock Exchange have to publish the management report.
- Publication Requirements
The balance sheet and the profit and loss account must be prepared in accordance with the model which is on your disposal in the annexe of the Act. on Accounting.
Tax payers must file tax returns within three months following the end of the tax period. Czech legal entities that are required to prepare audited financial statements must file their tax returns within six months following the end of the taxable period.
- The services offered by auditing and accounting firms in the Czech Republic are fully comparable with western standards. All members of the Big Four audit firms are present on the Czech market. In addition, several other international auditing firms are present, along with dozens of independent Czech auditing and accounting specialists.
The Chamber of Auditors trains and certifies Czech auditors and the Chamber of Certified Accountants provides similar services for accountants. All of the country's tax advisors are associated in the Chamber of Tax Advisers Chamber of Certified Accountants associates specialists what hold a certificate one of three levels ("Accounting Assistant" - technician, "Balance Accountant" - executive accountans and "Accounting Expert"). Bigger companies prefer to have their accounting department. A lot of smaller companies pay an external society or accountant to keep their accounts.
- Professional Accountancy Bodies
Union of Accountants
Chamber of Certified Accountants
- Member of the International Federation of Accountants (IFAC)
- The Union of Accountants is an IFAC member.
- Member of Other Federation of Accountants
- Member of the EMAA, European Management Accountants Association.
- Audit Bodies
- Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. For more information, you can contact the Chamber of Auditors of the Czech Republic.
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