Year-end tax checklist for s.r.o.: what to handle before December 31

What can still reduce your tax base this year

For long-term assets, it is worth considering whether it makes sense to complete planned investments this year, or conversely to pause depreciation where that fits the company's economics: both are legal tools for shaping this year's financial result.

If repairs to tangible assets are planned, it is worth checking whether there is still time this year to correctly create and record a statutory reserve under the Act on Reserves.

Payroll costs can also be reduced tax-efficiently through employee benefits, specifically meal allowance payouts or contributions to supplementary pension and life insurance, up to the limits valid for 2026.

It is also worth considering profit shares or extraordinary bonuses for executives before year-end, provided the financial result and the company's articles allow it.

Administration you do not want to deal with in January

A physical count of inventory and long-term assets should happen exactly at the balance sheet date, not weeks later. It is also worth reviewing open receivables and deciding, for each one, whether collecting it this year is realistic or whether it is time to write it off, while also reconciling balances with supplier payables.

Documentation for the annual financial statements, prepared continuously throughout the year, saves several extra days of work in January and February, while scrambling to track down a whole year's worth of documents at the last minute is a poor way to start the new year.

It is also worth checking that contracts with key suppliers and customers are still valid and up to date, since changes to terms around the turn of the year are easy to miss amid the pre-Christmas rush. Companies registered for VAT should additionally verify their reverse-charge setup and confirm that rates are correct for any goods or services that may have changed during the year.

What to watch out for

Most of the mistakes an audit later catches happen in exactly these final weeks of the year, when a company scrambles to make up for what it neglected earlier:

1. Last-minute purchases with no clear link to the business are among the first things a tax authority checks during an audit, so they should always have a clear justification.
2. Representation expenses, meaning business lunches and gifts above the statutory limit, are excluded from tax-deductible costs by law, something that is often underestimated right at year-end.
3. This year's financial result also affects the advance payments you will make in 2027, so it is better to calculate that ahead of time than to be caught off guard by them in January.

The ideal window for this work is October and November. December leaves only a few working days, and accountants and tax advisors are usually at their busiest time of year, so there may be no time left for more complex moves like replanning depreciation or creating reserves.

These steps only work when done continuously and well in advance. At CATO, we will review your s.r.o.'s current financial position and propose what is still worth handling this year.

I want to review my year-end tax optimization