Amendment to the Accounting Act, the Auditors Act, and the Tax Adjustment Act
Amendment to the Accounting Act, the Auditors Act, and the Tax Adjustment Act
CHANGE IN THRESHOLD VALUES FOR THE CATEGORIZATION OF ACCOUNTING ENTITIES, GROUPS OF ACCOUNTING ENTITIES AND AUDIT REQUIREMENTS
The main change is the adjustment of the monetary criteria for the thresholds for categorizing accounting entities and groups of accounting entities. In the case of the micro accounting entity category, the values of total assets and annual net turnover are increased by approximately 22%. In all other categories of accounting entities, including groups, the values of total assets and annual net turnover are increased by 20%. The criterion of average number of employees remains unchanged.
The new thresholds for accounting entities are summarized in the following table:
|
Threshold values |
Micro entity |
Small entity |
Medium entity |
Large entity |
|
Assets (in CZK million) |
11 |
120 |
600 |
greater than 600 |
|
Annual net turnover (in CZK million) |
22 |
240 |
1,200 |
greater than 1,200 |
|
Average number of employees |
10 |
50 |
250 |
greater than 250 |
The new thresholds for groups of accounting entities are summarized in the following table:
|
Threshold values |
Small group |
Medium group |
Large group |
|
Consolidated assets (in CZK million) |
120 |
600 |
Greater than 600 |
|
Consolidated annual net turnover (in CZK million) |
240 |
1,200 |
Greater than 1,200 |
|
Consolidated average number of employees |
50 |
250 |
Greater than 250 |
When determining the category of an accounting entity for 2026, the previous two years (2024 and 2025) are assessed exclusively according to the new thresholds. However, in the case of the financial statements for 2025, 2023 is assessed according to the old thresholds and 2024 according to the new ones. Among other things, the category of the accounting entity affects the scope of the financial statements. Medium-sized and large accounting entities are required to prepare a cash flow statement and a statement of changes in equity and are required to disclose more information in the notes to the financial statements.
For accounting periods beginning on or after January 1, 2026, only large and medium-sized accounting entities are subject to mandatory audit, regardless of the type of business entity.
SUSTAINABILITY REPORT AND INFORMATION ON INTANGIBLE ASSETS
From January 1, 2025, large accounting entities that are public interest entities and have more than 1,000 employees will be required to include information in their annual reports on intangible resources on which the accounting entity's business model fundamentally depends and which are a source of value creation for it, including an explanation of how these intangible resources are essential to its business model and how they are a source of value creation for it.
The same accounting entities are required to prepare a sustainability report and have it audited by an auditor from January 1, 2025.
A consolidated sustainability report must be prepared by a consolidating accounting entity that is a public interest entity, is a large group, and has exceeded the criterion of an average of 1,000 employees per accounting period.
If an accounting entity does not have the necessary data on its value chain available in the accounting period beginning before December 31, 2026, it shall explain in the sustainability report or consolidated sustainability report the efforts it has made to obtain this information, stating the reasons why it was not possible to obtain this information and the ways in which this information will be obtained in future accounting periods.
Other accounting entities may voluntarily prepare a sustainability report only if its content meets the conditions described in the Accounting Act or in accordance with internationally recognized sustainability reporting standards.
EQUALIZATION TAX
Top-up taxes are a tool that ensures that large multinational companies pay a minimum effective tax rate of 15% in each country where they operate. Companies from groups of companies with a consolidated turnover of more than EUR 750 million per year are subject to top-up tax obligations. The effective tax rate is calculated based on consolidated financial statements. Both current and deferred taxes are included in the calculation. However, all parameters of the top-up tax need to be adjusted, which presents a number of challenges. For Czech companies that are part of such international or domestic groups, this means the need for deeper cooperation with the parent company, unification of data sources, and the search for new data points and flows in order to be able to meet the requirements of this legislation.
We have written about adjustment taxes in more detail here, for example: Adjustment tax: new obligations for multinational groups.
Key changes for clients
A fundamental and highly anticipated change is the extension of the deadlines for submitting information reports and tax returns. The deadlines for submitting Czech and assigned adjustment tax have thus been unified. Information reports will be submitted within 15 months after the end of the reporting period. For the first, so-called initial, period, this deadline is extended to 18 months. The tax administration will therefore expect the first information reports by June 30, 2026, for the reporting period, which was the calendar year 2024. For those taxpayers who have a reporting period other than the calendar year, the deadlines will run from the end of the reporting period that began after January 1, 2024.
The deadline for filing tax returns for both Czechia and assigned adjustment tax is again 22 months after the end of the reporting period. For the calendar year, which is the first year for which adjustment taxes will be calculated and paid, it is therefore necessary to file a tax return by the end of October 2026.
The amendment also provides further clarification of terms and exceptions, including the definition of the reporting period, clarification of tax benefits, and also modifies the decision-making system, which for the purposes of adjustment taxes is primarily carried out by the highest parent entity. It further specifies the rules for currency conversion, and the safe harbor rules have also undergone changes.
First filing for adjustment taxes
In June 2025, the Ministry of Finance published a draft decree on tax return forms and information overviews for both Czechia and assigned adjustment tax. While the tax return will have three parts – for Czechia's equalization tax, for the assigned equalization tax, and a common section – the information overview will be used for both equalization taxes. The tax administration will accept all these filings exclusively in electronic form in xml format.
The Czech tax administration has confirmed that it expects to accept the information overview submitted by the highest parent entity also for Czech withholding tax, provided that it contains all the data necessary for the administration of withholding tax. These reports should be exchanged automatically between tax administrations in the EU under DAC 9. Unfortunately, its implementation into Czech law has not yet been approved.
The tax administration also announced that it does not currently plan to prepare an interactive form for completing the information overview; only its content structure should be published. It will therefore be entirely up to taxpayers to secure a technical solution for creating the information overview in xml format. If taxpayers are unable to use the information overview prepared by the highest parent entity (e.g. because the parent company will not prepare such an information overview or will not exchange information with the Czech tax administration, or because the information overview will not contain all the necessary data), taxpayers will have to prepare this overview themselves, including the technical aspects.
The Chamber of Tax Advisors pointed this out in its comments. We can only hope that the tax administration will reconsider this approach and provide a uniform tool for creating a standardized information overview, e.g., on its tax portal.