Amendment to the Act on Accounting effective from 1.1.2022

Redefine the definition of an accounting unit

Following the amendment to the Commercial Code, foreign natural persons and Slovak natural persons are considered as accounting units only if they prove their expenses incurred in achieving, securing and maintaining income for the purpose of finding the income tax base, with the exception of those who decide to keep tax records under the Income Tax Act.

At the same time, the Act defines persons other than accounting units, which are a natural person with permanent residence in the Slovak Republic, a statutory body or a member of the statutory body of the entity registered in the Commercial Register before the deletion of a company from the Commercial Register, which incur selected obligations by the Act on Accounting. These are obligations related to the retention of the entity's accounting documentation which has ceased or ceased business or other gainful activity, the obligation to deposit documents prior to the deletion of the company from the commercial register

Electronization of accounting

The signature of the person responsible for booking is no longer a required item on the accounting document as well as the obligation to indicate the accounts on which the accounting case will be booked. An entity which keeps its books in a double-entry accounting system will continue to be obliged, at the request of the tax authority or authorized persons, to provide access to accounting software and accounting records at the time of the inspection, demonstrating an indication of the accounts on which the accounting cases in the entity are accounted for.

Section 33 clearly sets out how the transformation of accounting record can be done - changing the form of the accounting record from paper to electronic form or electronic form to paper. An entity may transform the one accounting record only once. At the same time, it is not possible to transform an accounting record that has already been the subject of a transformation (e.g. in connection with the retention of accounting documentation, an entity may not change the electronic form to a documentary accounting record for which it has already carried out the transformation by scanning and no longer has an accounting record in its original paper form).

In addition to the guaranteed conversion, an entity may transform an accounting record from paper form into an electronic by scanning.

The aim of the proposed alternative is to carry out a transformation that results in the maximum possible conformity, including visual with the original or accounting record in paper form. If the output is a scan (image) stored in raster graphics file format (e.g. an image stored in .pdf, .png, .jpg, .tiff format), such an electronic accounting record shall be considered demonstrable and the presentation of the accounting record in its original paper form shall not be required.

Scanning can transform all kinds of accounting documents, which are currently produced mostly in paper form, such as expenditure receipts, e-kasa receipts, etc.

In the transformation of invoices, it is possible to transform the paper invoice into electronic. 'Persons obliged to keep invoices may choose the form of their storage, regardless of how the invoices were sent or made available. It is for these persons to consider whether they will keep invoices in electronic or paper form.'.

Obligation of audit in a non-profit entity

The law specifies when the audit of the financial statements arises due to the receipt of the shares of the assignated tax. Important for determining this obligation is the accounting period in which the shares of tax paid were received, while maintaining the obligation to audit the financial statements for the financial years in which the shares were used.

At the same time, the content of the annual report is determined for non-profit entities. As before, only those entities that fulfil the conditions for compulsory audit will be obliged to prepare an annual report. The content of the annual report for these entities shall be adapted to the activities they carry out. The annual report shall include the accounts and the auditor's report, but shall be kept separately in the register. A non-profit organisation may decide according to its types of activity whether to provide an overview according to the activities it carries out or by project. Separately, the costs or expenses associated with the management of the entity are calculated.

A company in crisis

According to Sections 67a to 67i of the Commercial Code, if a company is in crisis, it may not return transactions replacing own funds.  That prohibition also applies if the company were not in crisis, but would have been in crisis because of the return of the own resources substitutes. In determining the threat of bankruptcy, the ratio of equity to liabilities is used -less than 8:100. To determine the ratio for determining the risk of bankruptcy, accrual accounts are not included in the value of the entity's liabilities.

Inventory of stocks

The amendment extends the possibility of stocks inventory to the month following the date on which the financial statements are prepared (similar to other tangible assets).

New sanctions

The extension of the obligation for entities to transform accounting records, ensure the authenticity of the origin and the intactness of the contents of the accounting record are added to Sections 32 and 33 among the provisions for which the entity can be penalized in the event of their breach.

A serious violation of the Accounting Act is, for example, the non-keeping of accounting, the non-preparation of financial statements, as well as the execution of accounting entries outside the books, the execution of entries on accounting cases that have not arisen, the concealment and non-accounting of the facts that are the subject of the accounts. In such cases, a penalty of between EUR 1,000 and EUR 3,000,000 can be imposed.

And an entity fails to comply with the obligation to deposit an accounting document in the register and the tax office does not have financial statements at its disposal to quantify from the value of the assets the amount of the penalty can impose a penalty of between EUR 100 and EUR 10,000.

In particular, provision is made for a penalty for breaches of the provisions on the storage and protection of accounting documentation amounting to between EUR 100 and EUR 100,000.

The penalty for non-compliance with the obligation imposed by the last statutory body or a member of the statutory body registered in the Commercial Register before the company is removed from the commercial register and for breach of the obligations related to the storage of accounting documentation by a natural person, is in the amount of between EUR 100 and EUR 100,000.