Implementation of EU regulations on ESG – draft act in the List of legislative and programmatic works of the Council of Ministers

For information purposes, the following has been included in the List of Legislative and Programmatic Works of the Council of Ministers: draft act amending the Accounting Act and certain other acts.

The project aims to implement into the national legal system: 

1. Directive (EU) 2022/2464 of the European Parliament and of the Council  – implementation deadline: 6 July 2024; 
2. Commission Delegated Directive (EU) 2023/2775  – implementation deadline: December 24, 2024.

Directive 2022/2464 introduces changes to corporate sustainability reporting that will be implemented into national law, including:

• the scope of entities obliged to report has been expanded – the obligation now covers: 
  • all large units, 
  • entities that are the parent company of a large capital group, 
  • small and medium-sized entities admitted to trading on a regulated market (excluding listed micro-enterprises) and  
  • subsidiaries and branches established in an EU Member State that meet certain conditions and size criteria, whose ultimate parent entity or independent entity, respectively, is subject to the laws of a third country and whose net sales revenue generated in the EU exceeds EUR 150 million;
• the type of reporting standard has been unified – moving away from the previous freedom in choosing reporting standards towards the mandatory use of the European Sustainability Reporting Standards;
• the scope of reported information has been expanded – the information will be more detailed than before;
• the form/place of reporting has been regulated – information is mandatory presented in a separate section within the report on the entity's activities;
• verification of sustainable development reporting was introduced – mandatory certification of reported information by statutory auditors;
• reports were digitized.

In terms of implementation Commission Delegated Directive (EU) 2023/2775 in the Accounting Act it was proposed to increase the thresholds by 25%:

• defining individual categories of units and
• specifying the obligation to audit the financial statements.

In addition, the project includes proposals for provisions that are not the implementation of EU regulations, but are related to raising the thresholds in Commission Delegated Directive (EU) 2023/2775:

• increasing the amount of net sales revenue by PLN 25%, exceeding which results in the obligation to keep accounting books and apply the Accounting Act;
• increasing the criteria for net sales revenues and total balance sheet assets by 25%, the fulfillment of which allows entities to apply the following simplifications:
  • classifying financial leasing contracts according to the criteria specified in tax law, not the Accounting Act;
  • abandoning the creation of deferred tax provisions and assets;
  • applying the provisions of the Accounting Act to the valuation of financial instruments instead of the provisions of the relevant regulation of the Minister of Finance;
  • using a simplified method of calculating the cost of manufacturing a product.

The planned date of adoption of the project by the Council of Ministers is the second quarter of 2024..

The project's content is not yet available. More information about the entry is available here. here.