Misdemeanors imposed under the Accounting Act

The relevant tax authority is legitimate to discuss misdemeanors under the Accounting Act, whereas generally, these misdemeanors are defined by law in the provisions of Section 37 et seq. For some types of misdemeanors, the Accounting Act imposes an upper limit that is derived from the percentage of the entity’s assets. In this case, the debatable question was, what is the limitation period in this situation. The Act on Misdemeanors states that the limitation period is 1 year or 3 years in case of misdemeanors for which the fine’s upper limit rate is at least CZK 100,000.

The tax administrator argued that in this case the sanction had reached the limit of CZK 100,000 and therefore it should be based on a longer preclusive period. However, the Supreme Administrative Court did not agree with the tax administrator’s statement and annulled both judgment of the Regional Court in Pilsen and the decision of the tax administrator. The court stated that the one-year objective limitation period is a principle of the Act on Liability for Misdemeanors. On the contrary, the three-year is only an exception to this principle that is valid only in case of misdemeanors with the upper limit fee at least CZK 100,000, whereas the law requires the explicit setting of an upper limit (in case of accounting fines, the amount of the penalty is determined by the percentage of the assets). In the present case, the liability for the misdemeanor thus expired even before the commencement of the proceeding. The court also stated its opinion that it is not possible for the limitation period for the same types of misdemeanors to differ depending on the current property situation of the offender.

In our next article, we will talk about the most common misdemeanors we encounter in our practice. Specifically, misdemeanors related to an insufficient inventory of assets and liabilities.