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.
The Antivirus program has been extended until the end of June 2022.
The Isolation Programme has been extended and will be valid until February 22 2022.
Financial support for testing of employees in companies and self-employed persons
From 29 November2021, the obligation to self-test in companies has been renewed.
The state provides a financial support of up to CZK 60 incl. VAT for 1 antigen test.
Companies doing business in the Czech Republic (for their employees) and self-employed persons (for themselves) are entitled to apply for this support to cover their costs for the purchased rapid tests.
The application for the support can be submitted since 1 January 2022 electronically via the website samotesty-covid.cz.
Currently, the obligation to test once a week applies, which employers are obliged to prove as part of a possible inspection. At the same time, we point out that this processes personal data and that data subjects must be properly informed of their rights under personal data protection regulations, in particular GDPR.
On November 22, 2021, the government renewed - the COVID 2021 program and the Uncovered Costs program.
Under the renewed COVID 2021 program, entrepreneurs will receive CZK 300 to 500 per employee, depending on the decrease in revenue in the relevant period.
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.
In the case of renewed 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 40% 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 relevant period for both programmes is from 1 November to 31 December 2021.
The date from which applications can be submitted has not yet been published for either programme.
In both cases, the condition for obtaining the support is a decrease in income by min. 30% relevant period compared to the comparison period. The comparison period is, with the exceptions set out in both programmes, the period from 01.11.2019 to 31.12.2019.
State guarantee programmes
During March and April of 2020, 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. This program has been extended until June 2022, and both Antivirus A and Antivirus B programs are operating again.
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 beenprolonged until 28. February 2022.
The application can be filed using the website https://www.mpsv.cz/antivirus. We will be happy to assist you with the application filing.
Programme "COVID - 2021"
On November 22, 2021, the Czech Government also approved the renewal of the COVID - 2021 programme. The intention of the programme is the same as that of the COVID - Uncovered Costs programme, namely to help businesses combat the adverse financial impact of the COVID-19 pandemic, consisting mainly of a decline in sales.
Support is provided to businesses that:
- as a result of the COVID-19 pandemic, their sales have fallen by at least 30 % in the reference period compared to the comparison period, i.e. from 1 November 2019 to 31 December 2019
- had at least 1 employee at the beginning of the reference period
- has not yet used up the maximum amount of aid
- has not infringed the measures taken in relation to the spread of COVID 19
- the applicant does not cease its activity within 3 months of the decision
The time span of the reference period is the same as for the COVID - Non-covered costs programme, therefore it is calculated from 1 November 2021 to 31 December 2021.
The support amounts to:
- 300*number of employees (full-time equivalent)*number of days of the reference period - in case of a decrease in sales of at least 30 % but less than 50 %
- 500*number of employees (full-time equivalent)*number of days of the reference period - in the event of a fall in sales of at least 50 %
Managing directors with a contract of office and cooperating persons are also considered employees under the Income Tax Act if the applicant is a natural person.
Receipt of support from the COVID - 2021 programme excludes receipt of support from the COVID - Uncovered Costs programme.
However, an applicant for a contribution from the COVID-2021 or COVID-Uncovered Costs programmes may also receive support of the Antivirus or Compensation Bonus type.
Programme "COVID - Non-covered costs"
On November 22, 2021 the Government approved the renewal of the COVID - Uncovered Costs programme. The aim is to help cover the absence of revenue for those businesses whose turnover has fallen by at least 30% during the decision period compared to the same period in 2019. The programme is designed to preserve these businesses or mitigate the adverse impact of the COVID 19 pandemic on them.
Support is provided to those entrepreneurs who:
- have not violated the measures taken to prevent the spread of COVID 19
- are not in liquidation or bankruptcy
- are not unreliable payers
- have no arrears of taxes or other levies, except for instalment agreements, tax deferrals or arrears of taxes and levies related to the effects of COVID 19
The time period in which the earnings decline is tracked is called the determination period, which runs from November 1, 2021 to December 31, 2021.
The time period against which the fall in earnings in the decision period is compared is called the comparison period. This is calculated from November 1, 2019 to December 31, 2019 or from November 1, 2018 to December 31, 2018, depending on the election.
If the applicant's business activities were curtailed during these periods or the applicant became an entrepreneur after 01.01.2019, the applicant can choose two consecutive months within the period 01.11.2019 to 31.10.2021 as the comparison period.
The amount of support is:
- 40 % of the uncovered costs, if the loss of earnings in the reference period is at least 30 % but less than 50 % compared with the comparison period
- 70 % of the uncovered costs if the loss of earnings for the reference period is at least 50 % compared with the reference period
A special scheme applies to 'micro-enterprises', for which the amount of aid is 90 % of uncovered costs, but only if earnings in the reference period fall by at least 80 % compared with the reference period. Micro-enterprises may choose a reference period between 01.07.2021 and 31.12.2021, and may set the reference period from 01.07.2019 to 31.12.2018 or from 01.07.2018 to 31.12.2018.
The maximum amount of contribution that an applicant can receive is 30 million EUR. The maximum amount of the contribution is CZK 30 000.
The programme will last until 30.06.2022.
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.
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 1.000 for each day on which the self-employed person meets the conditions stipulated by law. The compensation bonus can be claimed by self-employed persons with an active trade licence as of 22 November 2021 or with a short-term interruption of the trade after 22 November 2020. The decisive factor is whether the predominant part of the applicant's income was derived from an activity that was significantly affected by the COVID-19 virus pandemic.
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 22 November 2021 and are CZ residents. If the partners are not tax residents, they can apply only if they assume that they will meet all the conditions for applying the tax reduction for the tax period to which the relevant bonus period falls, according to Section 35ba(2) of the Income Tax Act. Furthermore, the share of a shareholder must not be represented by a share certificate. 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 120,000 and the company has to be tax resident of the Czech Republic or of another EU/EEA member state as of 22 November 2021. The amount of the compensation bonus in this case is CZK 1,000 per day.
In addition, persons who, within the period from 1 June 2021 to 31 October 2021, 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)]. With some exceptions, the compensation bonus cannot be used by a person who, during the compensation period, performed another activity as an employee under which he/she was covered by health insurance. The amount of the compensation bonus in this case is CZK 500 per day.
Government announced two new bonus periods
- First bonus period from 22.11.2021 to 31.12.2021
- Second bonus period from 1.1.2022 to 31.1.2022
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.
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