Section 66 of the Public Register Act and Section 21a of the Accounting Act require all accounting entities which are entered in public registers to publish their financial statements.
Section 66 of the Public Register Act (Act No. 304/2013 Coll.) and Section 21a of the Accounting Act (Act No. 563/1991 Coll.) require all accounting entities which are entered in public registers (as well as all those who come within the purview of the pertinent special laws) to publish their financial statements. For practical purposes, these are business companies (i.e., corporations), associations of apartment owners, registered clubs and societies, and institutions and foundations.
Mandatory publication deadlines
The statutory time period for lodging the financial statements with the public register is 30 days from the day on which the financial statements were approved by the supreme body of the company, but in any case no later than 12 months from the balance sheet date. The financial statements of audited companies must be made public within 30 days from the day on which two conditions are satisfied: the auditor has certified the statements, and they have been approved by the general meeting (or by the sole shareholder, as the case may be). If the financial statements are ultimately not given approval, they must nonetheless be eventually published, i.e., no later than within 12 months from the balance sheet date.
Documents to be lodged
The scope of documents which are subject to mandatory publication varies, depending on the size (and category) of the accounting entity. The Accounting Act differentiates between micro, small, medium, and large accounting entities, depending on their asset value and the size of their workforce.
The scope of mandatory publication of the financial statements follows from Sec. 18 (4) of the Accounting Act, which recognizes two possibilities: full publication or abridged publication, including reports certified by the auditor (if the accounting entity meets the criteria for mandatory certification of the financial statements by the auditor).
Non-audited micro and small accounting entities may simply publish an abridged balance sheet and the annex (notes) to the financial statements.
Medium-sized and large accounting entities publish the full scope of their financial statements, i.e., balance sheet, profit and loss statement, annex (notes) to the financial statements, cash flow statement, and the statement on changes in equity.
Accounting entities which must have their financial statements certified by the auditor shall publish their financial statements in such scope and such wording as they were certified by the auditor – i.e., annual report, auditor’s report, report on intragroup relations, and the decision on the distribution of profit.
All these documents shall be drawn up and lodged in the collection of deeds in the Czech language. The duty to procure the publication of the financial statements lies with the statutory body (executive management) of the company.
How to publish the financial statements
By submitting an electronic request for lodging of the relevant documents, via databox, to the register court with territorial jurisdiction. As an alternative, the virtual mail desk known as ePodatelna may be used; e-mail requests are admissible provided they are furnished with an electronic signature.
As of 1 January 2022, companies have the option, when filing their corporate income tax return, to complete and submit a special schedule to the tax return: the request for submission of the financial statements to the collection of deeds kept by a public register. Based on this request, the finance office will itself take care of the publication of the financial statements. This method is particularly attractive for micro and small accounting entities who are not subject to mandatory auditor certification. As part of their tax return, they have already provided the revenue service with all relevant documentation, and by way of the above-mentioned request, they can unload the burden of having to enter this documentation into the collection of deeds, onto the revenue service (finance office).
The finance administration has posted an FAQ on its website concerning the amendment to the Accounting Act, in connection with this possibility to submit the financial statements to the collection of deeds via the tax administration. These questions and answers build upon a published memorandum with information on the amendment to the Accounting Act by Act No. 609/2020 Coll.
Penalties for failure to publish
The revenue service has the power to impose a fine if the obligation to lodge the financial statements with the public registers has not been observed, whereas this fine may amount to up to 3% of the net asset value (as per Sec. 37a of the Accounting Act). Aside from thus being sanctioned by the finance office, companies also expose themselves to punishment by the register court under Act No. 304/2013 Coll., on public registers of legal and natural persons, which provides for a fine of up to CZK 100,000. The court may moreover commence proceedings on the dissolution of the company if the financial statements have not been submitted for publication for two consecutive accounting periods and the accounting entity (company) does not respond to the court’s invitations to make remedies.
Source:
Finance Administration