We have already written about the new Accounting Act, which was passed on 10 June 2021 and comes into force on 1 January 2022. The old Accounting Act and the Cabinet of Ministers’ Rule No. 585 of 21 October 2003, Bookkeeping and Accounting (“Rule 585”) will cease to apply as a result. New accounting rules will be issued to accompany the new Accounting Act. This article explores the content of the proposed rules and the time frame for adoption.
The new rules will eventually replace Rule 585, but the economy and the business environment will remain substantially unaffected. The new rules will basically take over the provisions of Rule 585 and will be aligned with the provisions and terminology of the new Accounting Act.
The proposed rules were announced at the meeting of state secretaries on 19 August and will be submitted to the State Chancellery on 21 October.
Although the new rules are expected to come into force along with the new Accounting Act on 1 January 2022, Rule 585 will continue to apply to the extent it is consistent with the new Accounting Act until the date the new rules take effect or 1 July 2022, whichever is earlier, in line with the transition provisions of the Accounting Act.
When it comes to storing documents in a cloud, the proposed rules require a minimum of 96.7% availability of accounting software and accounting data each month.
Rule 585 provisions for the following areas are omitted from the draft:
Provisions for these areas are included in the new Accounting Act to the extent necessary.
Information about the proposed rules has been posted on the Finance Ministry’s website, and members of the public can still take part in improving the draft by submitting written opinions on it, even though it has already been announced at the meeting of state secretaries.
Once the proposed rules are adopted, Finance Ministry representatives will provide comments at various public events as well as in the press and media.
From 1 January 2022 the new Accounting Act will replace the Accounting Act 1992 applicable currently. One of the reasons for adopting the new Act was to update the rules on the storage of supporting documents.
The rapid evolution of digital financial services has led to virtual currency (“VC”) being increasingly used in everyday payments. In July 2021 the State Revenue Service issued guidance on the tax and accounting treatment of virtual currency transactions, offering insights into the practical application of laws and regulations to income people earn from VC dealings. This article explores the personal income tax (“PIT”) treatment where an individual buys and sells VC.
Every company must have an accounting policy in place that specifies its accounting principles, as well as laying down rules for how its financial statements should be prepared and how its internal documents should move around. The accounting policy must fit the nature of the company’s business.
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