As part of the amendment to the Accounting Act, the definition of net turnover has been changed and from the new year companies will calculate their turnover in a different way than before. 

Before the amendment, net turnover was calculated as total revenue less sales discounts. Now, net turnover will be based only on revenue from the sale of products and goods and the provision of services. These are mainly revenues booked in accounts 601, 602 and 604, so from the new year onwards, accounts 648 - other operating income and 663 - exchange gains are not included in turnover.

In addition, in determining the amount of turnover, it will be necessary to take into account the sector in which the entity operates, since, depending on this fact, certain accounts in account groups 64 and 66 may be included in the company's net turnover.  

This change will affect the determination of the category of the entity, which in turn affects the obligation to have the financial statements audited. The mandatory audit of financial statements applies automatically to large and medium-sized entities. In the case of small entities, the auditor's verification of financial statements is mandatory for companies exceeding the criteria set out in the law, one of which is exceeding a turnover of EUR 80 million. CZK.

On the basis of the new definition of net turnover, some accounting units may no longer be subject to the obligation to have their financial statements audited. Thus, small entities that make significant exchange rate gains may see their revenues included in net turnover fall and, as a result, may not be required to have their financial statements audited. 

The above will also have an impact on the deadline for filing corporate income tax returns. Where an entity is required to have its accounts audited, the deadline for filing the accounts is automatically within 6 months after the end of the tax year. If the entity no longer has this obligation, the standard 3month deadline for filing the tax return after the end of the accounting period will apply. In the case of electronic filing, the deadline is set at 4 months.

Small entities that will no longer be required to have their accounts audited and wish to continue to file their tax return within six months of the end of the tax year may still do so on the basis of a power of attorney for a tax adviser. 

If you have any doubts when determining the net turnover of an entity or if you need to postpone the deadline for filing your tax return, please do not hesitate to contact us.

Author: Barbora Plšková - Junior Tax Consultant

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