At the current time, the measures seeking to mitigate the negative effects of the COVID-19 pandemic which were adopted during the spring/summer 2020 phase aiming to help and support the businesses are being reactivated or widened.
On March 8, 2021, the government approved two new assistance programs for entrepreneurs - the COVID 2021 program and the Uncovered Costs program.
These programs will replace the existing specific programs (Covid - Gatstro Closed establishments, Rent, etc.). The program Antivirus and compensation bonus remain.
Under the new COVID 2021 program, entrepreneurs will receive CZK 500 per employee.
This aid is meant for every business, not only for those which are closed down. The entrepreneurs will be able to combine this program with Antivirus.
COVID 2021 will apply retroactively from 11 January 2021, so it will follow up on the end of the Covid - Closed Establishments program, which ended on 10 January 2021.
In the case of new Uncovered Costs support, the company will prove its costs for the given month, from which all other aids the company is receiving will be deducted, and the company will receive 60% of the difference from the state. In this case, the only program that can be deducted, i.e. received, at the same time is the Antivirus program.
The Uncovered Costs program will be valid from 1 January 2021.
In both cases, the condition for obtaining the support is a decrease in income by min. 50% compared to the given month in 2019 or 2020 (according to the choice of the entrepreneur, which year will be more advantageous for him).
State guarantee programmes
During March and April, the state subsidy programmes COVID I, COVID II and COVID Prague have been implemented. They aimed at small and medium-sized businesses as well as sole traders, who were forced to restrict or put on hold their business activity due to a measures against the spread of COVID-19.
The applicants to COVID I programme receive a credit from the government, while other programmes provided state guarantee for commercial credit. Subsidized by the state was also the payment of interest on said loans.
The capacity of each programme was always very quickly exhausted.
The last activated programme was the COVID III programme with the capacity around CZK 600,000,000. It is intended for businesses with not more than 500 employees; it is provided in the form of a state guarantee in the amount of 80 – 90 % of the credit amount of a commercial credit. As usual, the purpose of the credit must be to cover the operating costs. The programme was prolonged till the end of the year 2021.
Please let us know if you are interested in this subsidy.
The “Antivirus for Business” programme
Companies can apply at the Labor Office for a subsidy within the programme “Antivirus for Business”.
The programme introduces special conditions for employers whose businesses have been affected by the coronavirus pandemic. Depending on the situation, the employer may receive a subsidy of 60 % or 100% of the salary compensation paid to the employee.
The subsidy may be provided only for those employees whose employment lasts at least three months (at the time of filing the application). This condition should prevent abuse of the subsidiary by the entrepreneurs and creation of fictive jobs.
You can find more information under https://www.schaffer-partner.cz/en/coronavirus-and-work.
The payment of the subsidy has been prolonged until 30 April 2021.
The application can be filed using the website https://www.mpsv.cz/antivirus. We will be happy to assist you with the application filing.
Taxes and Levies
The following is an overview of tax measures implemented with a view to mitigate adverse impacts of government restrictions imposed in connection with the Covid-19 pandemic (situation as at 9 March 2021).
Corporate and personal income tax
Deadlines for filing tax returns
- Remission of penalties for late filing of corporate and personal income tax returns for the 2020 tax year, provided a tax return is filed no later than 3 May 2021 (standard filing) or 1 June 2021 (for tax returns filed electronically), as appropriate.
- Remission of default interest on late payment of corporate and personal income tax for the 2020 tax year, provided the payment is made no later than 3 May 2021 (standard filing) or 1 June 2021 (for tax returns filed electronically), as appropriate.
- The remissions apply to all taxpayers, provided a tax return is filed / income tax is duly paid within the extended deadline.
The remissions will be APPLIED AUTOMATICALLY, subject to the above provisions. Therefore, it is not necessary to submit individual applications.
Retroactive use of tax losses
- Possibility to retroactively claim relief for tax losses incurred in two previous tax periods and five subsequent periods. Taxpayers may deduct tax losses in the form of supplementary tax returns or in the course of ongoing tax inspections (where appropriate).
Deadlines for filing tax returns
- Remission of default interest on VAT for the tax periods of September 2020 through March 2021 or Q3 2020 through Q1 2021, as appropriate, provided the tax, on which such interest is assessed, is paid no later than 16 August 2021.
The remission only applies to taxpayers, whose revenue in the period of 01 June 2020 – 30 September 2020 originated predominantly from activities prohibited or restricted by a Government resolution in the period of 22 October 2020 – 31 March 2021.
The remission must be applied in the form of a notification to a tax authority.
- Remission of penalties and default interest for the tax period of February 2021 - provided the relevant obligations are fulfilled no later than 15 April 2021.
- Remission of penalties for late filing of supplementary VAT returns to be filed by 31 March 2021 - provided it is filed no later than 15 April 2021.
Remission of penalties for the failure to file a control (review) statement for February 2021 or where the period for compliance partially covers the period from 1 March 2021 to 21 March 2021 and such obligation is fulfilled no later than 15 April 2021.
The remissions will be APPLIED AUTOMATICALLY, subject to the above provisions. Therefore, it is not necessary to submit individual applications.
Remission of the output VAT for selected products
- Remission of the output VAT for the supply of 'in vitro' diagnostic medical devices used for testing for and in connection with COVID-19 and for the supply of COVID-19 vaccines compliant with the requirements of the European Union legislation in the period from 16 December 2020 to 31 December 2022.
- Remission of VAT on free supplies (i.e. donations) of facemasks, ventilators, COVID-19 test kits, protective clothing, gas masks, protective goggles, gloves, and other products defined in accordance with the tariff classification of medical supplies in connection with COVID-19, provided such goods are supplied, free of charge, in the period from 31 December 2020 to 3 June 2021.
Remission of the output VAT for the supply of filtering half masks and respirators (always without an exhalation valve) in the period from 3 February 2021 to 3 June 2021, provided they are intended to protect users, as specified by a manufacturer.
- Remission of default interest on road tax for the 2020 tax year, provided the tax, on which such interest is assessed, is paid no later than 16 August 2021.
- Advance payment of road tax for the 2021 tax year payable by 15 April 2021.
The above remissions only apply to taxpayers, whose revenue in the period of 01 June 2020 – 30 September 2020 originated predominantly from activities prohibited or restricted by a Government resolution in the period of 22 October 2020 – 31 March 2021.
- Remission of penalties for late filing of road tax returns for all taxpayers and remission of default interest for the 2020 tax year - provided a tax return is filed / road tax is paid no later than 1 April 2021.
Real estate acquisition tax
- Real estate acquisition tax returns to be filed in the period from 31 March 2020 to 31 July 2020 may be filed by 31 August 2020 without any sanctions. Tax payments/advance payments may also be made by the aforementioned date. The extension stems from a general remission of penalties for late filing of tax returns and of default interest / interest on deferred tax payments.
- In the event a tax return is not filed / tax is not paid by 31 August 2020, the aforementioned general remission shall not apply and sanctions will be assessed retroactively as from the original deadline.
- Abolition of the real estate acquisition tax. On 24 September 2020, Act No. 386/2020 Coll., repealing the Senate Statutory Measure on the Real Estate Acquisition Tax, was published in the Collection of Laws.
Real estate tax
- Remission of penalties for late filing of real estate tax returns or partial returns for the 2021 tax year - provided a tax return is filed no later than 1 April 2021.
Administrative fees and charges
- Remission of administrative fees and charges in connection with the above measures.
Electronic registration of sales (EET) to be suspended until the end of 2022
- Electronic registration of sales (EET) suspended for all stages until 31 December 2022; this means that taxpayers are not required to transmit sales data to tax authorities, issue receipts pursuant to the Registration of Sales Act or post information notices.
Advances on mandatory pension insurance
- Payments under the mandatory pension insurance scheme were remitted for all self-employed persons for the period of March – August 2020. The total contributions will be reduced by an amount corresponding to minimum advances on pension insurance for six months in the 2020 annual statement.
School attendance allowance
Originally, self-employed persons have received a school attendance allowance of CZK 424 per day, from April 500 CZK per day, respectively. In October, new crisis attendance allowance was approved, which allowed the self-employed to claim a daily care allowance in the amount of 400 CZK. The allowance can be applied for when filing an application under the following link (in Czech only) https://osetrovne-osvc.plus4u.net/info/
After a bill that increases the day-care allowance from 60 to 80 percent of the daily assessment base has been adopted, the government has approved the crisis care allowance in the amount of 70 percent of the daily assessment base. The recipient of this allowance shall thus receive approximately up to 80% of his net income. The crisis allowance applies to parents taking care of their children up to age of 10 years (as opposed to the earlier measures for parents of children up to age of 13 years) who cannot attend school and pre-school institutions due to coronavirus measures, parents of children who are not provided for and take part in the school attendance, parents of children, who cannot attend schools due to the quarantine in family and caretakers of disabled persons living with them in a common household. The increased allowance will apply for the period from 16 October till the end of the emergency state/reopening of the schools, no later than 30 June 2021.
Compensation bonus for freelancers and small ltd., shareholders of limited liability companies (s.r.o.) respectively
Self-employed persons (self-employed persons) can apply for a compensatory bonus, in the amount of CZK 500 for each day on which the self-employed person meets the conditions stipulated by law.
The compensation bonus may be further applied for by shareholders of limited liability companies with up to 2 shareholders, or more shareholders, that these are members of one family, and were shareholders of the company as of 5 October 2020 and are CZ or EU/EEA residents. The compensation bonus does not apply to shareholders of limited liability companies that were being dissolved or bankrupt during the “bonus period” or ones recorded as unreliable VAT payers. To apply for the bonus, the company also needs to reach a minimum turnover of CZK 180,000.
In addition, persons who, within the period from 1 June 2020 to 30 September 2020, performed work on the basis of an agreement on work performed outside the employment relationship (i.e. on the basis of an agreement on the performance of work or an agreement on work activities) may also apply for a compensation bonus. according to the Labor Code) and as a result, in this period they participated in health insurance as an employee for at least 3 calendar months [i.e. for individual months, the employer charged them a deductible income higher than CZK 10,000 (in the case of an agreement to perform work), resp. at least CZK 3,000 (in the case of an employment agreement)].
The government announced
the first bonus period from 5 October 2020 to 4 November 2020 -> applications could have been submitted by 5 January 2021
the second bonus period from 5 November to 21 November 2020 -> applications can be submitted no later than 22 January 2021
the third bonus period from 22 November 2020 to 13 December 2020 -> applications can be submitted no later than 15 February 2021
the fourth bonus period from 14 December 2020 to 24 December 2020 -> applications can be submitted no later than 25 February 2021
Applicants who have drawn or are drawing also other support can apply for the First to Fourth bonus periods until 1 March 2021.
Self-employed persons with an active trade license as of 5 October 2020 or with a short-term interruption of a trade after 12 March 2020 can apply for a compensation bonus. It is decisive whether the predominant activity of the applicant is business in a field which has been directly closed due to government restrictions. Compared to the spring months, the concurrence with employment will no longer be examined, but only the so-called dominant source of livelihood for the decisive period from 1 June to 30 September 2020.
In addition to directly affected operators of bars, restaurants and fitness centers, this assistance is also aimed at activities directly related. These are entities that are in direct symbiosis with closed branches of the economy, who cannot easily replace their incomes. Typically, for example, a coach in the gym or an actor in the theater. A key condition for these applicants is to limit their ability to supply products or services or to carry out activities by at least 80% (in relation to the relevant period from June to September 2020). At the same time, this activity must be the main livelihood income for the supplier (entrepreneur in direct symbiosis), for which there is no easy substitute.
The compensation bonus can be REQUESTED with the competent tax office - in writting or per data-mailbox, and also online at https://ouc.financnisprava.cz/kbv/form/bonus. An obligatory part of the request is an affidavit of the entrepreneur that he was unable to fully or partially conduct his business due to measures related to COVID-19,
The compensation bonus is approved automatically as of the day in which the request is delivered to the tax office.
Making mortgages more available
The Czech National Bank has moderated the conditions on the provision for mortgages. In particular:
- The limit of mortgage amount to the value of real estate is increased from 80 % to 90 % .
- The ratio between the sum of total monthly expenses for the given credit and the net monthly income is increased from 45 % to 50 %.
- The Bank has also revoked the obligation to evaluate the number of household's yearly incomes needed to pay off all its debts.
State subsidy for the lease of closed business premises - COVID-Nájemné
This subsidy of the Ministry of Industry and Commerce COVID-Rent provides a contribution to the entrepreneurs who were negatively affected by the Government restrictive and preventive measure in regard to the COVID Epidemic.
Under this program, the state will offer 50 % of the rent for the business premises for July, August and September 2020 (COVID-Rent II), October, November, December 2020 (COVID-Rent III) respectively. Each subsidized subject may obtain up to CZK 10,000,000, but up to 50 % of the paid rent. The subsidy granted under the program COVID-Rent I through III are not calculated together for the this purpose, however, the sum of the EU-framework cannot be exceeded by the total subsidy of all programs.
It will be possible file applications for COVID-Rent II till 4 February 2021, 11:59 PM, for COVID-Rent III till 8 April 2021, 11:59 PM.
The registration made for the first round of the subsidy can still be used, the eIdentity is required.
A novelty for COVID - Rent III is that the affidavit of the landlord no longer requires verification of the signature and the Ministry of Industry and Commerce will also no longer assess the affinity of the landlord and the tenant. In addition, establishments that have had an exemption from government crisis measures and have not been prohibited from selling retail goods or providing services to customers may also apply. These include, for example, laundries, dry cleaners, florists, pet supplies, tea shops, etc. These establishments must prove a decrease in sales for the 4th quarter of 2020 compared to the same period of 2019 by at least 66%. The applicant shall also declare that they were never in a breach of any of the governmental measures.
State subsidy for the salary in closed businesses - COVID-GASTRO
On January 4, 2021, the Czech government approved a new COVID-GASTRO program to support those establishments that had to reduce or close down as a result of extraordinary government measures from October 2020. The support will amount to CZK 400 / day for each employee, for the period during which the activity was limited on the basis of government measures in the period from 14 October 2020 to 10 January 2021.
The call for applications for the support has been extended until 15 March 2021. So it is possible to submit applications by 15 March 2021 via the Agenda Information System (AIS) of the Ministry of Industry and Trade.
Who can participate in the program - entrepreneurs who do business according to the Trade Licensing Act (in addition to restaurants also retail stores and services)
Whose operation of business activities was directly restricted according to the government's crisis measures from 14 October 2020
Who have employees or so-called “cooperating self-employed persons” (for part-time employees, the amount is reduced by a coefficient)
For these employees, insurance premiums were paid in October 2020 to the account of the relevant social security administration
The limit per beneficiary is € 800,000.
Assistance from COVID - Gastro - Closed establishments can be combined with other support programs (Antivirus + Covid Rent II).
The Act on the reduction of penalty payments for social security insurance
The approved Act no. 255/2020 Coll. reduces the penalty for social security contributions (as for the part paid by the employer), which the employer shall pay, for May till July 2020 by October 20th, 2020, at the latest. In such a case the penalty, accruing due to the late payment of insurance payment for employer, shall be reduced by 80 %. The remaining part of the penalty in amount of 20 % corresponds to a yearly interest rate of less than 4 %. The unpaid insurance shall not be deemed to be an outstanding sum on part of the employer for purposes of e.g. confirmation of non-arrears.
Act on relief of social security payments
Act No. 300/2020 Coll. pardons social security premium payments. These are premiums for June, July and August 2020. Pardon of premiums means a reduction in the employer´s assessment base for the months in question.
The employer is entitled to the pardon of the insurance premium for a calendar month if the following conditions are met:
1) The number of the employees (in an employment relationship) participating in sickness insurance, does not exceed 50 for the given month;
2) There has not been a decrease of the number of employees, who are participating in the sickness insurance system or a decrease of the value of assessment base, by more than 10 %, in comparison with the last day of March 2020;
3) The amount of insurance which the employees are subject to is duly paid;
4) There is no reimbursement of wage costs from the employment support program approved by the government of the Czech Republic to mitigate the negative effects of COVID-19 (Antivirus program).
The reduction of insurance payment (the assessment base), can amount to up to 1,5 times the average salary per employee, for employees, whose employment relationship lasts at the end of the respective month. The reduction of insurance cannot be applied for retroactively, and thus should be taken into account while preparing the regular monthly overview