Tax and economic relief measures continue as the tax authorities in the Czech Republic respond to the coronavirus (COVID-19) pandemic.
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
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.