November 2023 – Directive (EU) 2022/2464 on corporate sustainability reporting (the "CSRD") was adopted at the end of 2022 and entered into force in January 2023, with a transposition deadline of 6 July 2024.
The Czech Republic has opted for a phased-in transposition process in two stages corresponding to the implementation timeframe under the CSRD:
This first phase, carried out as a minimum transposition, is already underway, namely in the context of the draft legislation on the consolidation of public budgets (the "Consolidation Package"). The Consolidation Package, among other legislative measures, introduces legislative provisions on sustainability reporting, to the extent corresponding to the first phase of reporting obligations under the CSRD (applicable to companies that already have reporting obligations under the current Non-Financial Reporting Directive (the "NFRD" (Directive 2014/95/EU)) and does not apply to other groups of companies. Additionally, the Consolidation Package introduces the process for the verification of sustainability reports.
The current expected effective date of the relevant provisions of the Consolidation Package is 1 January 2024.
The second phase, which will extend the reporting obligations to the remaining groups of companies, applicable from 2026 for the 2025 financial year, is expected to follow in the context of the forthcoming adoption of the new Czech Accounting Act. However, the proposed draft is still at the intergovernmental stage, and there has been no official progress to date. It should be noted that the draft does not yet include the reporting rules as required under the CSRD.
In light of the foregoing, the exact scope and timing of the final Accounting Act cannot be predicted, but the adoption of the new Act is expected in the second half of 2024 at the earliest. However, even companies for which the reporting legislation is still being drafted should take note that they may be required to provide reportable information by companies in their supply chain from other Member States, where implementation will be phased in differently, or even by Czech companies already subject under the first phase.
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