Since the moment of declaration of the State of Emergency by Czech Government on March 12, 2020, there have been a number of measures and laws, as well as state aid programs adopted in order to mitigate negative impacts of the corona crisis and those steps are being continuously reviewed. It is therefore recommended to observe the measures and their actual conditions on regular basis.
Apart from measures with respect to insolvency and measures and programs with respect to specific businesses, such as travel agencies, agriculture and forestry or producers of medical devices, respective support measures and state aid programs include in particular the following generally described measures:
1) Financing
(a) Loan Moratorium
Under recently adopted new law and with certain exceptions, the borrowers are allowed to notify their lenders about their interest to defer until October 31, 2020 repayment of their loans concluded before March 26, 2020. During the deferral period, the companies are required to repay only the interest as agreed in respective loan agreements. The law however does not apply, amongst others, to loans for trading with investment instruments, revolving loans or overdraft facilities.
(b) COVID Loan Financing Programs
There have been several programs introduced to provide certain businesses with interest free loans or with guarantees issued by state owned Czech-Moravian Guarantee and Development Bank. Issuance of such guarantees is intended to promote providing loan financing by commercial banks.
2) Certain Tax Related Measures
(a) Waiver of sanctions for late filing of personal and corporate income tax returns and real estate acquisition tax returns.
(b) Waiver of the June 2020 advance payment on personal and corporate income tax and deferral of the road tax advance payment payable in April and July 2020.
(c) Introduction of the concept of ‘tax loss carryback’ for personal and corporate income tax for the year 2020.
(d) Suspension of the obligation to electronically record sales.
3. Real Estate – Leases
(a) A protection against unilateral termination of commercial leases by a lessor due to payment default of the lessee caused by public measures adopted in relation to the pandemic has been introduced.
(b) State aid program is being prepared in order to cover 50% of payments for leases of commercial premises for the period between April and June 2020, provided that the lessor provides the lessee with a 30% discount on the lease payment and the lessee pays remaining 20%.
4) Enforcement Proceedings
A performance of judgement enforcement and executions by way of sale of movable property is prohibited until 30 June 2020.
5) Relief and bonuses for self-employed
(a) Compensatory bonus payment in the amount of CZK 500 (approx. EUR 20) per day starting from March 12, 2020 and ending June 8, 2020.
(b) Waiver of the obligation to pay monthly pension and public health insurance contributions with respect to contributions for March 2020 until August 2020.
(c) Contribution in the amount of CZK 424 (approx. EUR 16) per each day of quarantine / taking care of a family member.
6) Support of employers
Employers are entitled to receive compensation for salaries and other compensations paid to their employees in the following cases:
(a) Their operations were restricted or closed based on the measures taken by the authorities or their employee was ordered a quarantine; the state aid coves in general 80% of such costs, maximum of CZK 39,000 (approx. EUR 1,440) per employee and month;
(b) Their operations were negatively affected by the COVID-19 crisis; the state aid coves in general 60% of such costs, maximum of CZK 29,000 (approx. EUR 1,070) per employee and month.
Not all of the above measures and reliefs apply automatically and may therefore need to be applied for. Unfortunately, some of the application processes have turned out to be so burdensome for the applicants that the anticipated effects of the measures have not showed up yet.
Disclaimer: The information contained in this summary does not constitute legal advice. PRK Partners and individuals involved in the preparation of this summary are not responsible for the consequences of actions taken based on the information contained herein, which may not be accurate or comprehensive to a particular situation. We are available to provide you with a tailor-made legal advice upon your request.
