Publication of financial statements through the tax administrator
With effect from 1 January 2021, an amendment to Act No. 563/1991 Coll., on Accounting, as amended (the "Accounting Act"), introduced the possibility for accounting entities to publish their financial statements in the collection of documents of the public register through the income tax administrator. This option applies to entities that are commercial corporations and that do not submit their financial statements through the Czech National Bank. The provision in question can be found in Section 21b of the Accounting Act.
According to the new legislation, entities are entitled to request the locally competent income tax administrator to forward the financial statement attached to the tax return to the competent Commercial Court instead of the accounting entity. This method of transmission will apply for the first time to financial statements drawn up for an accounting period which began on 1 January 2021 and ended on 31 December 2021 at the earliest.
Form of application
- A necessary condition for the tax administrator to process a request for transfer of the tax return to the collection of documents is the electronic form of the tax return submission, respecting all the requirements (format, structure) and under the conditions defined by the Tax Code.
- The entity makes the request for publication of the financial statement by the tax administrator by filling in the annex to item 11 of Section I "Request for transfer of financial statements to the collection of documents of the public register" to the corporate income tax return form…
Source: Tax Portal > Electronic submissions (mfcr.cz) > Corporate Income Tax - for the tax year 2021 and for parts of the tax year 2022 > Annex to item 11 of Section I
Compliance with the obligation to disclose financial statements
- An entity must comply with the obligation to disclose its financial statement when the tax return is filed (as already mentioned, in the format, structure and under the terms of the Tax Code) with the relevant income tax administrator.
- The tax administrator is obliged to transmit the financial statement to the Commercial Court without undue delay, to the required extent in electronic form through the interconnection of public administration information systems.
Requirements for authorised representatives
- Since the tax return and the request for its transmission are an integral part of the tax return (as an attachment), it is not necessary for the accounting entity to grant a special power of attorney to the representative for this act.
- A power of attorney covering the normal scope of the act, i.e. for filing the income tax return (supplementary tax return), is sufficient.
Advantages of the new legislation
- The undeniable positive effects of this amendment include a reduction in the administrative burden of accounting entities, since the obligation to submit the financial statements to several public authorities at the same time, i.e. the Financial Administration and the Commercial Court, will be eliminated.