Government relief support in response to the COVID-19 measures in the Czech Republic
We’ll help you find your way around government relief, support and subsidies in connection with COVID-19.
Deferral of tax obligations to all business owners and self-employed people whose activities were immediately restricted or prohibited by government regulations.
VAT payments of entrepreneurs whose main activity has been prohibited or restricted are now automatically deferred until the end of the year, and advances on income tax and road tax have been waived. All they need to do is send a notification to the tax authority that they meet the relevant conditions. Notifications can also be sent by e-mail, but we recommend using a data box.
Taxpayers not automatically covered by the “General Pardon” (i.e. carrying out activity not explicitly prohibited but facing business difficulties, e.g. a large decline in demand) can apply for a tax deferral individually.
Retrospective application of tax loss
If a taxpayer is already anticipating a tax loss for the 2020 period, it will be able to reduce its tax base retrospectively by this loss for the 2019 tax period. The tax authority will release funds to the taxpayer as a priority. So, if you require cash immediately, you can apply for a tax loss immediately. You don‘t need to wait to file your 2020 tax return.
Compensation bonus of CZK 500 per day for the self-employed and partners of small s.r.o. (limited liability company) companies whose main business activities have been prohibited.
The same arrangements in the spring will apply. A payment of CZK 500 for each day of business activity that was prohibited or restricted can be applied for, using a very simple form. In the first phase, support for the period from 5 October 2020 to 4 November 2020 can be applied for, on the condition that the applicant’s main business activity is currently prohibited because of government restrictions. Or, it involves activities significantly linked to prohibited activities. This means that at least 80% of the income is from these areas.
Currently, the compensation bonus is at the draft stage and awaiting parliamentary approval. Applications aren’t yet being accepted – we’ll inform you as soon as possible when you can apply.
Postponement of EET until 1 January 2023
Until 1 January 2023, EET (Electronic Rerod of Sales - on-line reporting of sales to the Tax Office) is optional. Anyone wishing to do so, can send data to the tax office. It involves four phases, including establishments that had been required to register in the period before the coronavirus pandemic.
COVID rent: 2nd call
As in the spring, the government will pay 50% of the rent for the decisive period to entrepreneurs who had to temporarily close their premises because of the state of emergency measures.
Compared to the spring measures, however, there is a significant difference: a 30% discount isn’t required from the landlord.
The condition is that at least 50% of the rent for the relevant period has been paid.
Applications will be accepted until 21 January 2021. An application for rent is made in the same way, and the same documents should be provided as in the spring.
Guarantees for COVID III bank loans from ČMZRB
Českomoravská záruční a rozvojová banka (ČMZRB) provides guarantees of up to 90% of the principal of a guaranteed loan. As with previous loan programmes, you should apply for a loan from your (or any other) bank, which will advise you on the requirements for receiving support from ČMZRB.
For employers of prohibited and significantly limited operations: A plus and B programs
Both programmes are designed for employers; the aim is to reimburse part of the wage costs of affected operations and thus help protect jobs.
A Plus Programme: Replaces the original A Programme. This only applies to employers whose operations have been forced to close (or significantly restricted) by the government crisis measures or emergency measures imposed the Ministry of Health or other bodies. The contribution is 100% of salaries paid plus mandatory contributions, altogether a maximum of CZK 50,000/employee/month.
The form and details of this programme are still being fine-tuned, and modifications could still be made.
Programme B: for companies that are indirectly affected, i.e. not forced to close, but facing a decrease in sales. It has been extended until 31 December 2020, without further changes. The contribution will therefore continue to be provided to employers at 60% of salaries paid, including mandatory contributions, with a maximum of CZK 29,000 per month per employee. Programme B thus remains exactly the same as before.
If you require support in any of these areas, please don’t hesitate to contact us.