Rules for Archiving Documents in Accounting and Tax Records

Document archiving is an essential part of any accounting process. Properly storing documents in accordance with current regulations can protect entrepreneurs from issues during audits and serve as a legal safeguard.

Archiving accounting and tax documents means retaining all relevant paperwork — most commonly accounting, settlement, and tax records — for a specific period defined by applicable legislation.

Document archiving is important not only for potential tax inspections but also for the internal operations of the company or entrepreneur. In practice, these documents are most often referenced during audits, retrospective reviews, complaint resolutions, or legal disputes.

Types of Documents and Retention Periods

Each type of document — whether it’s an invoice, cash receipt, or financial statement — has a specific retention period, governed by various legal regulations. The archiving of accounting and tax documents is primarily regulated by the Accounting Act, the VAT Act, the Income Tax Act, and the Archives and Records Management Act.

In practice, it’s not enough to simply stash documents away somewhere. You need to know which documents to keep, for how long, in what format (paper or electronic), and how and when to dispose of them — such as by secure destruction. Following these rules precisely can help you avoid penalties for non-compliance and ensure you have the necessary evidence for accounting entries if ever needed.

Archiving Under the Accounting Act

Part Six of Act No. 563/1991 Coll., On Accounting, outlines the rules for storing accounting documents. Specifically, Section 31 sets out clear requirements for how long different types of records must be retained.

The first paragraph of Section 31 states:
“Accounting entities are required to retain accounting records for the period specified in paragraph 2 or 3. Unless otherwise stipulated in this Act, special legal regulations apply to their retention.”

Paragraph 2 breaks down accounting records into three main categories, each with its own retention period (unless otherwise specified by law):

• Financial statements and annual reports must be kept for 10 years from the end of the reporting period they relate to.
  
• Accounting records such as general ledgers, depreciation schedules, inventory records, charts of accounts, and transaction summaries must be kept for 5 years from the end of the relevant reporting period.
  
• Supporting accounting documents (e.g., invoices, bank statements) must also be retained for 5 years.
  

To summarize, accounting entities — including businesses and individuals who maintain proper accounting — are required to keep:

• Financial statements and annual reports: 10 years
  
• Ledgers, depreciation schedules, cash records, and accounting summaries: 10 years
  
• Supporting documents like invoices and bank statements: 5 years
  

The law does not mandate a specific format for storage. However, records must be readable, tamper-resistant, and reliable. In practice, storing documents electronically — such as in PDF format with a verified electronic signature — is acceptable, provided the files meet legal evidentiary standards. Document digitization is becoming increasingly common for this reason.

Archiving Under the VAT Act

Section 35 of Act No. 235/2004 Coll., On Value Added Tax, requires VAT payers to retain tax documents for 10 years from the end of the tax period in which the transaction took place. This applies to both outgoing and incoming transactions — meaning both issued and received invoices, whether in paper or electronic form.

The VAT Act uses the term “custodian” to refer to the person responsible for document retention. A custodian is defined as:

• A taxpayer who issued a tax document (or on whose behalf it was issued), for outgoing transactions, or
  
• A taxpayer or identified person with a registered office or branch in the Czech Republic, for all incoming transactions related to that office or branch.
  

In short, the law clearly states that tax documents must be retained for 10 years after the end of the tax period in which the transaction occurred. Moreover, if a person has a registered office or branch in the Czech Republic, the documents must be stored within the country — unless they are accessible remotely at any time, in which case storing them abroad is permissible.

The VAT Act also outlines acceptable methods of storage. Documents may be converted between paper and electronic formats. They may also be stored electronically using data processing systems — as long as the authenticity of origin and the integrity of the content are fully ensured.

Archiving Under the Income Tax Act

The Income Tax Act doesn’t explicitly define document retention periods. However, in practice, the most common periods used are 3 years or 10 years, depending on circumstances.

According to Section 38, paragraph 2, the tax authority may assess additional tax up to 3 years from the date the tax return was filed. However, this deadline can be extended in certain cases — such as when a tax loss is reported or if tax proceedings are initiated — potentially extending the period to 10 years in extreme situations.

From a practical standpoint, it is strongly recommended to keep all documentation related to income and expenses for at least 10 years. This includes contracts, invoices, payroll slips, transport waybills, and other related materials, as they may be needed to support the legitimacy of your tax returns during retrospective audits.

While the Income Tax Act does not contain direct archiving instructions, its link to the Tax Code and the possibility of back assessments place significant demands on document retention for entrepreneurs and businesses alike.

When and How to Safely End Archiving

Once the legal retention period has passed, documents can be safely disposed of — but always with proper care and attention to data security.

For paper documents, it’s recommended to use a cross-cut shredder or a certified document destruction service to ensure sensitive data cannot be reconstructed. For electronic records, files must be deleted using secure methods that prevent recovery by standard means.

Be cautious with documents that may fall under multiple legal requirements — for instance, an invoice that qualifies as both an accounting and a VAT document. In such cases, the longest applicable retention period should be followed — often 10 years. Some documents may also be subject to warranty or contractual obligations, requiring even longer storage.

Document destruction, especially for larger companies, should be carefully recorded. Maintain a log noting what was destroyed, when, and how, to prove compliance in the event of an audit. If you’re ever uncertain whether a document can be destroyed, it’s better to err on the side of caution — the potential fines for missing documentation can far outweigh the cost of keeping it a little longer.

Need help with archiving or document compliance? Whether you’re unsure about retention periods or want to digitize your archive securely, our experts are here to guide you. Reach out to 360WEDO and keep your business audit-ready.

Source:

https://www.podnikatel.cz/clanky/archivace-dokladu-co-musite-vedet-nez-je-skartujete/?utm_source=newsletter-html-w&utm_medium=text&utm_campaign=2025-07-27