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Czech Republic: New investment incentive; extension of employment support regimes (COVID-19)

Czech Republic: New investment incentive

Tax and economic relief measures continue as the tax authorities in the Czech Republic respond to the coronavirus (COVID-19) pandemic.

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The KPMG member firm in the Czech Republic prepared reports about the following COVID-19 relief measures.


New investment incentive criteria

The Ministry of Industry and Trade submitted an amendment to a decree on investment incentives that aims to provide more substantial support for investments involving selected “strategic products.” The most crucial change is the waiver of an obligation to invest in manufacturing activities with a higher added value for projects involving strategic products (as defined in Appendix No. 2 to the decree) such as protective and medical supplies/tools and pharmaceutical products. Moreover, all investment projects involving the production of strategic products are to be regarded as strategic investment projects—i.e., projects that may receive material support to acquire tangible and intangible assets of up to 10% of the investment value, without having to meet the requirements normally applicable to strategic investment projects (such as the minimum investment amount of CZK 500 million and the minimum number of 500 new jobs). Read a September 2020 report


Employment support regimes extended, 31 October 2020

The government approved an extension of two employment regimes (A and B) under the antivirus programme until 31 October 2020. The A regime (forced shutdowns and quarantine) compensates employers for 60% of wages paid by employers to employees not working due to COVID-19; the B regime (economic difficulties encountered by employers, such as limited availability of inputs or limited demand for products or services) compensates at a rate of 80%. Both were scheduled to concluded at the end of August 2020, but have now been extended. The extension of regime C (waiver of social security premiums) ended in August 2020. Read a September 2020 report


“Kurzarbeit” economic support plan

The Ministry of Labour and Social Affairs published a draft amendment that would provide economic support during a period of partial unemployment. The new program is referred to as “kurzarbeit” and it would replace the employment support regimes A and B (described above). Read a September 2020 report

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