Czech Republic

The Government of the Czech Republic took measures to support people employed by corporations, deployed Tax-related support for businesses and individuals, and implemented a variety of additional measures to help the economy and inform the population.

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Support for employers

• Anti-virus Program - the program aims to protect jobs with employers directly affected by government restrictions connected with COVID-19. A wage allowance will be provided by the Labor Office of the Czech Republic based on an application submitted by the employer. The applicability of both modes was extended to the end of 2020 and will cover costs for October, November and December.
• Mode A:
  • In the case of quarantine, the employee  receives compensation of 80 % calculated from the average reduced income (the cause of the problem is on the employee´s side);
  • In the case of business closure due to the Government´s order, the employee receives 100 % of his average salary (the cause of the problem is on the employer´s side);
• Mode B:
  • Limited available workforce on the side of employer caused by the order of quarantine or forced leave due to childcare (ošetřovné), which affects more than 30 % of employees – the employee receives compensation of 100 % of his average salary;
  • Limited available input (services, material, products) necessary for the business´ activity – the employee receives compensation of 80 % of his average salary;
  • ‒Limited demand for the business´ services and products - the employee receives compensation of 60 % of his average salary;
• In the case of Mode A (quarantine),  the state substitutes 80 % of paid salary including taxes, up to 39 000 CZK.
• In the case of Mode A (business closure),  the state substitutes 100 % of paid salary including taxes, up to 50 000 CZK.
• In the case of Mode B, the state substitutes 60 % of paid salary including taxes, up to 29 000 CZK.

Compensation bonus for the self-employed and small limited liability companies

• Compensation Bonus amounting to CZK 500  for each calendar day of the bonus period (5 October 2020 and 21 November 2020) if the activity was restricted or limited by the governmental epidemic measures (e.g. retail, services, restaurants etc.)

Support for parents

• Caregiver allowances are paid by the state to employees (one parent/caregiver) who must take care of children under 10 years of age and older handicapped persons not attending school during the COVID-19 emergency when schools and other child care facilities are closed. The allowance amounts to 70% of the average reduced income of the employee (at least CZK 400). For a self-employed person, the compensation amounts to CZK 400.

Financing

EGAP (Export Guarantee and Insurance Company) will provide guarantees to large companies with more than 250 employees

• Companies will be able to apply for loans ranging from 5 MCZK  to 1,400 MCZK.
• Companies must have at least 20 % of their yearly revenue coming from export to qualify and will be able to use loans up to a maximum of 25 percent of total annual revenue from products or services.

COVID III guarantees 

The Ministry of Finance has prepared a support programme in form of a portfolio guarantee provided by the ČMZRB (state owned bank). 
Credit and risk assessment under the programme will be carried out directly by individual commercial banks which will provide loans. 
Enterprises (up to 500 employees)  may qualify for the provision of guaranteed loan. 
The maximum loan amount supported by the guarantee is CZK 50 million, and it must be used for operational financing.

COVID – Rent support

• The Ministry of Industry and Trade launched a second call to participate in COVID – Rent, a programme providing support for lease expenses
• Lessees meeting the definition of eligible applicant will be entitled to compensation equal to 50% of rent for the relevant period from 1 July 2020 to 30 September 2020
• a key condition for obtaining this support is applicants having been forced to close their premises due to the October government resolutions.
• Applications may be submitted until 21 January 2021
• Further conditions shall be laid down directly by the call.

Other subsidies

Government opened other subsidy programes to compensate subjects in sport, culture, transport etc.

Masks

• All persons are prohibited from selling all personal protective equipment according to the European Parliament and of the Council (EU) 2016/425, class FFP3 manufactured and placed on the market in accordance with standard EN 149: 2001 A1: 2009 to other persons than those specified in emergency provision.

Customs formalities

• Import of test kits for proof of disease by COVID-19 - Diagnostic devices that include coronavirus test kits, if they are not intended for self-testing and are not included in List A and B (Annex 2 to Government Regulation No. 56/2015 Coll.),do not need to be registered and the person who import such devices may not be registered according to the requirements of Act 268/2014 Coll. on medical devices.
• Information for entities - import, transport and use of alcohol for the production of disinfectants

Payment facilities

• Remission of an administrative fee for acceptance of an Application for tax refund related to imports or for remission of customs arrears
• With respect to spread of SARS-CoV-2 the Minister of Finance issued several Decisions to waive the tax penalties and the administrative fee due to an extraordinary event (i.e. remissions of VAT for free supply of specific goods,  remission of interest on late payment in specific situations etc.)

Export

• The Government prohibited re-export of drugs abroad during the emergency state. Information on exports of medicines not covered by the prohibition - medicines which has foreign-language label on the packaging are not subject to the export ban and also export of medicines with multilingual label will be assessed individually by the customs office (for both options, the customs office require affidavit of exporter to which market is export shipment intended.

• The Ministry of Health introduced a five scale system for easing or restricting the lock down measures https://koronavirus.mzcr.cz/en/
• Currently the whole Czech Republic is in the highest risk scale e.g. with restrictions on outside movement between 9 pm and 5 am, closed shops and restaurants and ordered home office work where possible
• The scale will be evaluated every based on two weeks data (e.g. number of positive test overall and for people older 65 years, ration od positive tests on total tests etc.).

• No entry to the territory of the Czech Republic for foreigners (except for specific categories of foreigners such as holders of Czech residence visas/permits over 90 days, family members of EU citizens residing in the CR and others specified in Government decree n°511).
• Internal border controls with Germany and Austria and airspace border controls have been restored; 
• Entrance possible only with certificate on negative PCR test,
• Acceptance of visa applications, temporary and permanent stays; procedures for applications for short-stay visas, procedures for applications for residence permits over 90 days have been suspended until further notice unless the applicant is enrolled into government program or classified as specific case.
• International passenger transport (road, rail, water) by means of transport with a capacity of over nine persons has been banned.

Important websites

• Government of the Czech Republic
• Ministry of Interior
• Ministry of Foreign Affairs
• Ministry of Health
• Ministry of Finance
• Financial Administration
• The Czech Social Security Administration
• Ministry of Industry and Trade
  
• Ministry of  Labor and Social Affairs
• Czech Government
  
• KPMG Czech Republic Tax and Legal update

Tax: Patrick Leonard – pleonard@kpmg.cz
Legal: Viktor Dušek - vdusek@kpmg.cz, Barbora Cvinerová - bcvinerova@kpmg.cz