A third of outsourced accountants don't know how to get licensed

Although the licensing system for outsourced accountants comes into effect on July 1 of this year, approximately one-third of accounting service providers are unaware of the documentation required to obtain a license. Furthermore, one-quarter are uninformed regarding the licensing fee.

In a survey of 279 outsourced accountants, Jumis Pro, the developer of the accounting and business management system Jumis, found that 32.5% of respondents did not know what documents needed to be prepared just two weeks before the new regulations took effect. Additionally, 23.2% were unaware of the licensing fee.

The law stipulates that to maintain a valid license, outsourced accountants must submit an updated civil liability insurance policy to the State Revenue Service (SRS). Licenses will be issued for a five-year period and will be eligible for renewal thereafter. A state fee of 100 euros has been established for the issuance or renewal of a license.

Nearly half of those surveyed, or 48.3%, believe that the licensing fee will lead to an increase in service costs.

Conversely, only 16.2% estimate that the new regulations will help organize the market by reducing the number of service providers.

"The licensing of outsourced accountants has been discussed for several years, yet it appears that the implementation of these new regulations has caught many market participants unprepared. The results of our survey show that a portion of the market not only lacks knowledge on how to obtain a license but is also unaware that it can be revoked. 45.1% of outsourced accountants have not heard under what circumstances the SRS may suspend a license, and 48.3% do not know what actions could lead to its cancellation," notes Viesturs Slaidiņš, head of Jumis Pro.

Starting July 1, 2021, the SRS will issue licenses to outsourced accountants, and a public register of outsourced accountants will be established simultaneously. This system is intended to help clients identify qualified service providers. Previously, there was no state-recognized mechanism available to help determine which service providers were competent and reliable when selecting an outsourced accountant.

To provide outsourced accounting services, a company must obtain a license issued to a responsible accountant who possesses at least three years of experience in the field and a level four professional qualification (college education) in accounting, economics, management, or finance. The law provides for a transition period until July 1, 2023, during which outsourced accountants may continue to provide services without a license.

During this transition period, outsourced accountants who do not meet the required professional qualifications may pursue further education to comply with the statutory licensing requirements. Individuals with accounting experience but lacking the appropriate education may obtain a license valid until July 1, 2025, by submitting documentation to the SRS confirming they have commenced or are continuing studies that meet the professional qualification requirements. Meanwhile, individuals who are receiving an old-age pension or are within six years of retirement age, and who possess relevant accounting experience, may receive a license for a five-year period, valid no later than July 1, 2027. Licenses can be obtained via the Electronic Declaration System (EDS), where the application form will be available starting July 1, 2021.