Switching from single-entry to double-entry bookkeeping works differently in Slovakia and the Czech Republic. In Slovakia these are two full accounting systems (single-entry and double-entry accounting), and the switch is triggered mainly by entry in the Commercial Register. In the Czech Republic the comparable step is moving from tax records (daňová evidence, which is not accounting) to accounting, triggered by Commercial Register entry or by exceeding a turnover of CZK 25 million. In both countries the change is made only at the first day of the accounting period.
Two different systems: Slovakia versus the Czech Republic
The first thing to understand is that the two countries do not speak the same language here. In Slovakia, the law (Act No. 431/2002 Coll. on Accounting, Section 9) recognises single-entry and double-entry accounting as two genuine accounting systems. A sole trader may use single-entry accounting; companies must use double-entry.
In the Czech Republic, a sole trader typically keeps tax records (daňová evidence) under Section 7b of the Income Tax Act — a cash-basis record of income and expenses that is deliberately not accounting. The counterpart is accounting (formerly double-entry) under Act No. 563/1991 Coll. So in Slovakia you switch between two accounting systems, while in the Czech Republic you switch from a non-accounting record into accounting. We compared the broader context in our overview of professional accounting in Slovakia.
What triggers the switch
In Slovakia the most common trigger is entry of a sole trader in the Commercial Register, after which single-entry accounting is no longer an option. A sole trader may also switch voluntarily. Companies such as an s.r.o. keep double-entry accounting from the moment they are formed, with no choice.
In the Czech Republic a person becomes an accounting unit, and must keep accounting, mainly after entry in the Commercial Register or after turnover exceeds CZK 25 million in the preceding calendar year, measured under the VAT Act. Companies keep accounting by law. For tax advisory context across both countries, see our note on Slovak tax advisory for companies.
When the change takes effect
Here the two countries agree. In both Slovakia and the Czech Republic the change is made only at the first day of the accounting period — 1 January for entities using the calendar year. The system cannot be changed during the year; the current period is finished under the old regime and the new one starts from the beginning of the next period.
In the Czech Republic there is also a timing nuance: after exceeding the turnover threshold, the duty to keep accounting usually begins only from the first day of the following accounting period, not immediately. This delayed start is a frequent source of mistakes.
How the transition is carried out
In Slovakia the procedure is set out in a Ministry of Finance measure on accounting procedures. The entity closes the single-entry books and prepares financial statements, carries out an inventory count of assets and liabilities, sets up a chart of accounts, and opens the double-entry books with an opening balance sheet carrying the balances forward.
In the Czech Republic the mechanics are similar — an opening balance sheet is drawn up at the first day and balances are transferred from the tax records. In both countries a careful inventory is essential, because an error in the opening balances carries through the whole following period.
What the tax impact looks like
This is where the Czech system is more explicit. Under Section 5(8) and Annex 3 of the Income Tax Act, the move to accounting increases the tax base by the value of inventory, receivables and advances paid, and decreases it by advances received and debts. Crucially, the value of inventory and receivables may be spread into the tax base over up to nine years under Section 23(14), softening the one-off hit.
Slovakia resolves the transition through the accounting procedures measure rather than a single explicit nine-year spreading rule, which is one of the practical differences between the two regimes. In both cases, planning the switch in advance is what keeps the first year under control.
Does single-entry accounting still exist
In Slovakia, yes — for sole traders and certain non-business entities. In the Czech Republic, single-entry accounting survives only for a narrow group such as associations, trade unions or churches, typically non-VAT payers with income and assets below CZK 3 million. Ordinary Czech businesses have only tax records or full accounting to choose from, which is why the Czech switch is almost always from tax records into accounting.
Are you facing a switch to double-entry bookkeeping in Slovakia or to accounting in the Czech Republic and want the balances carried over correctly and the tax impact handled well? We are happy to prepare the transition and guide you through it.
FAQ
When must a business switch to double-entry bookkeeping?
In Slovakia, mainly after a sole trader is entered in the Commercial Register, or voluntarily; companies use double-entry from formation. In the Czech Republic, a person must keep accounting after Commercial Register entry or after turnover exceeds CZK 25 million in the preceding year. In both countries the change applies only from the first day of the next accounting period.
What is the tax impact of switching in the Czech Republic?
Under Section 5(8) and Annex 3 of the Income Tax Act, the tax base increases by the value of inventory, receivables and advances paid, and decreases by advances received and debts. The value of inventory and receivables may be spread into the tax base over up to nine years under Section 23(14), which helps avoid a heavy one-off tax burden in the first year of accounting.
Is Slovak single-entry accounting the same as Czech tax records?
Not exactly. Slovak single-entry accounting is a genuine accounting system available to sole traders. Czech daňová evidence under Section 7b of the Income Tax Act is a cash-basis record of income and expenses that is not accounting at all. That is the core structural difference: in Slovakia you switch between two accounting systems, in the Czech Republic from a non-accounting record into accounting.