Business Support

At the current time, the measures seeking to mitigate the negative effects of the COVID-19 pandemic which were adopted during the spring/summer phase aiming to help and support the businesses are being reactivated or widened. 

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

From 6 April 2020, it is possible to file a request to the Employment Office for a subsidy within the newly launched programme “Antivirus for Business”. The programme introduces special conditions for employers whose businesses have been affected by the coronavirus pandemic.   

According to the situation, the employer may newly receive a subsidy of 80 % or 100 % of the salary compensation paid to the employee – see more information in the info boxes below.   

The Government has prolonged the subsidy, so that it can be claimed for the time period from 3 March to 31 December 2020.  

On 16 June, 2020 the Chamber of Deputies has approved the C Mode of the Antivirus programme, which enable the companies with up to 50 employees to apply for the remission of the social insurance const, providing, that :  

  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. No compensation of salary expenses from the B Mode is taking place.   

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.   

The employers whose operation was involuntarily closed or significantly reduced due to the government measures are able to claim a compensation under the Antivirus Plus programme (also known as A Plus). 

The Antivirus Plus programme was introduced by the government resolution from October 14, 2020 and enables the employers to draw a subsidy in the amount of 100 % of already paid wage compensation including mandatory levies. For a successful claim, the employer needs to have paid theirs employees wage compensation on the grounds that the operation of such employer was involuntarily closed or considerably reduced (typically aiming on the restaurants which are closed but still offer take away). The contribution can be paid in the maximal amount of 50,000 CZK for month on employee and subsidies the costs arising due to the paying of the wage compensation for work impediments that have arisen after October 1, 2020. Of course, the contribution cannot be claimed for the those employee who are not impeded in their work. 

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

Below is an overview of the tax measures introduced as subsidies to ease the negative effects of government restrictions in relation to Covid-19 (as of 29.10.2020). 

Personal and corporate income tax

Deadlines for filing tax returns 

  • Immunity from fines for the late filing of corporate income tax returns or income tax statements and personal income tax returns if the tax returns or the tax statements for the 2019 tax period are filed no later than 1 July 2020. Subsequently, the deadline was prolonged until 18.8.2020. 

  • Immunity from late interest payments of income tax liabilities if the taxes are paid no later than 1 July 2020.  Subsequently, the deadline was prolonged until 18.8.2020. 

  • Actual postponement of the deadline for announcement of exempt income until 18.8.2020 (penalties for late submission are waived). 

The above waivers will be APPLIED AUTOMATICALLY without any need to file individual requests. 

Income tax advance payments 

  • Waiver of income tax advance payment payable by 15 June 2020 for taxpayers whose taxation period is a calendar year. Taxpayers subjects to an economic year may apply for a waiver of advance payment for June (or other months), based on an individual application, with a documentation of reasons for its reduction or cancellation. 

  • Waiver of income tax advance payment payable in the term from 15.10.2020 until 15.12.2020 for a taxpayers of personal income tax and company income tax whose income is reached from activity that has been forbidden or restricted based on resolutions of the Government of the Czech Republic. 

These advances will be automatically waived based on announcement to the Tax Office. 

Retroactive deduction of tax loss 

  • There is a possibility to deduct a tax loss retroactively in the two previous tax periods and 5 subsequent tax periods. The taxpayer can deduct the tax loss retroactively in the form of an additional tax return or as part of an eventual tax audit.              

VAT

Deadlines for filing tax returns 

  • Waiver of fines for the failure to submit a Control statement if the obligation related to tax payment occurred between 1.3.2020 and 31.7.2020 (up to CZK 1,000) upon individual request. 

  • Waiver of the interest on late payments or interest on a deferred amount upon individual request if the payment obligation occurred between 1.3.2020 and 31.7.2020. 

  • Waiver of fines for late submissions provided that interest on the late payment of the declaration was at least partially waived. 

VAT payment 

  • Waiver of interest on late payment of VAT to taxpayers whose activities were restricted or forbiden by a government resolution, for the period September 2020, October 2020 and November 2020 and for III. quarter 2020 for quarterly payers, if VAT is paid no later than 31.12.2020. These entities  are therefore automatically forgiven for interest relating to the late payment of VAT. Intention of late payment must be announced to the tax administrator; it is recommended to submit the announcement by the original tax due date. 

Waive of the VAT payment 

  • Waiver of VAT for a gratuitous provision  (i.e. donation) of face masks, ventilators, COVID-19 testing kits, safety wear, gasmasks, safety glasses and gloves, as well as other goods designated as medical material in the connection with COVID-19 in the HS nomenclature, if such goods were delivered gratuitously in the period from 12 March 2020 until 17 March 2020 and in the period from 1. October 2020 until 31. December 2020. 

  • Waiver of VAT for a gratuitous provision (i.e. donation) of goods to a payer, who is entitled to production of disinfectants, alcohol solutions, sterilisers, cleaning solutions etc., if such gratuitously provided goods have been used for the production of said products and the gratuitous provision has occurred in the period from 12 March 2020 until 17 May 2020 and in the period from 1. October 2020 until 31. December 2020. 

Road Tax

  • Waiver of interest fees and the interest on deferred amount for road tax advances, payable by 15 April and 15 July, only if the payments of such advance payments occur by 15 October at the latest. 

  • Waiver of advance payments to taxpayers whose main business activity belongs into one of the sectors which are affected by government restrictions is waived for 2020. 

Real estate acquisition tax

  • Real estate acquisition tax statement which filing is dated between 31 March 2020 and 31 July 2020 can be filed without any sanctions by 
    31 August 2020. Until this date, it will be possible to defer the payment of tax or advance on tax. Such a deferral can be reached by a general waiver of fines for a late filing of the statement as well as the interest payment of the payment for tax deferral. 

  • If the tax statement is not filed and the tax is not paid by 31 August 2020, the general waiver shall not be applied, and the sanction shall be calculated to run from the original due date. 

  • Abolition of the Real Estate Acquisition Tax. On 24 September 2020, Act No. 386/2020 was published in the Collection of Laws, which abolished the Senate Statutory Measure and the Real Estate Acquisition Tax. 

Administrative fees

  • A waiver of administrative fees for filing an application for the waiver of late payment interest or interest on a deferred amount, an application for the waiver of a tax payment or an application for the waiver of a fine due to the failure to submit a VAT control statement if the application is submitted no later than 31 July 2020.

EET will be postponed to 2021 

On May 4 2020 the government approved a proposal by the Ministry of Finance to postpone all waves of EET until the end of 2020. 

The postponement will apply both to enterprisers belong into the first two waves (ie retail stores, gastronomy and accommodation services) and to those who have been obligated to record their revenues electronically from 1.5.2020. The suspension of EET means that taxpayers do not have to send sales data to the tax administrator, do not have to issue receipts in accordance with the Sales Registration Act and are not obliged to place an informational announcement. 

The last amendment to the law published in the Collection of Laws on 30 October 2020 approved the extension of the suspension of EET for all waves until 31 December 2022. 

Pension insurance payments

There was also approved an act that waives all self-employed from obligation to pay compulsory pension insurance in term between March and August 2020. In their annual statement, the total premium will be reduced by the amount corresponding with the minimum pension insurance payments for six months. 

Deduction of tax loss

The government is preparing an amendment to Income Tax law which expands tax loss carry back options for two preceeding taxable periods. The amendment also introduces a prolongation of loss deduction from the current 5 subsequent taxable periods to 6 . The tax payer could exercise the tax  loss carry back right by submitting an additional tax return or within the course of an ongoing tax audit. This could first apply for tax loss assessed for the period ending 30th June 2020 or later.  

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. 

Entrepreneurs can start claiming a compensation bonus approved on 9 April 2020. On 21 October 2020 has the Chamber of Deputies approved the prolongation of the period for claiming the compensation bonus. 

The compensation bonus can be claimed by all entrepreneurs who as of 12 March 2020 performed their business activity as 

a) main undertaking activity or 

b) secondary undertaking activity due to a reason other than employment. 

For the third compensation period from 5 October 2020 to 4 November 2020 the decisive factor is, if the predominant activity was in the scope of the business.  

The compensation bonus is set in the amount of CZK 500 per each day, in which the entrepreneur fulfils the statutory conditions. Thus, the entrepreneur may apply for a subsidy for the whole period, which amounts to CZK 25,000 at maximum. The bonus cannot be claimed for the days when the entrepreneur received an unemployment subsidy. 

The compensation bonus can be REQUESTED with the competent tax office. The request can be submitted by an interactive form which is published at website of the Ministry of Finance. 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, mainly due to: 

  1. closing or partial closing of the premises, 

  2. quarantine of the entrepreneur or his employee/s, 

  3. child care, 

  4. decreased demand or 

  5. lack of supplies. 

The compensation bonus is approved automatically as of the day in which the request is delivered to the tax office. 

The compensation period has originally been set for 12 March to  30 April 2020, later it was extended until 8 June. The amendment has introduced a third compensation period from 5 October till 4 November 2020. 

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 

On 16 October, 2020, the Government has prolonged the subsidy programme "COVID-Rent." This subsidy of the Ministry of Industry and Commerce 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. Each subsidized subject may obtain up to CZK 10,000,000. The award of the subsidy will no longer require the condition that the landlord waives 30 % of the rent, however, it is still to be proven that the non-subsidized part of the rent had been paid. It will be possible file applications till 21 January 2021, 11:59 PM. The registration made for the first round of the subsidy can still be used. 

Penalty for social security contributions 

The Act on the reduction of penalty payments for social security insurance has been adopted by the Senate, as proposed by the Chamber of Deputies. 

The approved Act reduces the penalty for social security contributions (as for the part paid by the employer), which the employer shall pay, for May (due date between June 1st to 20th), June (due date July 1st to 20th), and July (due date between August 1st – 20th), 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 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. 

A necessary condition of reducing the penalty is the proper payment of social security insurance, which the employer pays for the employee.  

Bill on relief of social security payments 

Besides the already approved act on the reduction of penalty for the late payment of social security, the Senate is currently discussing another bill, which fully relieves the employers from the duty to pay social security payments. This will affect payments for June, July and August 2020.  A waiver of social security payment is deemed to be a reduction of the employer’s assessment base for the months in question.  

This reduction may apply when 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. No compensation of salary expenses from the COVID 19 program is taking place. 

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. 

Extension of the compensation bonus to shareholders of limited liability companies (s.r.o.) 

The possibility of receiving a compensation bonus by the shareholders of limited liability companies was prolonged for the third compensation period, i.e. from 5 October till 4 November 2020. The compensation bonus may be applied for by shareholders of limited liability companies with up to 2 shareholders, or more shareholders, provided that these are members of one family. 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.  

The amount and other conditions of applying for the compensation bonus are similar to the original conditions for the freelancer compensation bonus.  

Tax Liberatisation Package

On June 8 the government appoved a "Tax Liberatisation Package". Now, the package will be subject to the legislative process.

  • De facto postponement of filling of real estate acquisition tax returns until end of the year 2020 (remission of sanctions arising from late filling and payment).
  • VAT exemption for free of charge supply of protective equipment, in particular face masks, respirators, disinfectant agents etc., where the obligation to submit the tax returns has arisen in the period between of May 18 and July 31.
  • De facto postponement of the deadline for filling of the income / corporate tax returns to August 18. This date has been chosen with regards to the extension of the deadline for approval of regular financial statements of corporations (waiver of sanctions regarding the late filling and payment).
  • Automatic waiver of interest for default and interest for deferred payment that have arisen in the period from March 12 to December 31 in the cases in which the tax administrator individually allowed the deferral or payment in instalments on the grounds regarding the coronavirus pandemic.
  • Waiver of the administrative fee for the filing of applications with the financial or customs authority by the end of 2020 (application for tax deferral or instalment plan, application for waiver of the interest for delay, application for waiver of the penalty for non-filling the VAT Control Statement etc.).
  • De facto postponement of the deadline for announcement of tax-exempt income to August 18 (waiver of penalties for the late submission).
  • Waiver of the penalty for late submission of employer statement (on personal income tax from dependent activity), if the employer's statement was filled until May 31. 
  • De facto postponement of the deadline for filling of the supplementary income tax return for 2018 for tax subjects, who have during 2019 changed the mode of deduction of expenses, have started bookkeeping or the keeping of simplified tax records etc. The deadline for the filling and payment of the tax is postponed on August 18, 2020 (waiver  of penalties regarding the late filling or payment).