On 24 March 2020, the Ministry of Finance announced its plans to propose measures to mitigate the effects of COVID-19 for taxpayers. The measures will include:
Proposals to support employees and employer
Proposals to support employees and employers in which the Government will compensate funds paid out by companies:
- Mode A: Employee in quarantine – 60% of salary to be paid to the employee, thereof 100% to be recovered by the government;
- Mode B: Closed operations – 100% of salary to be paid to the employee, thereof 80% to be recovered by the government
- Mode C: Significant part of employees in quarantine or doing child care – 80% of salary to be paid to the employee, thereof 50% to be recovered by the government
- Mode D: Business interruptions due to supply disruption – 80% of salary to be paid to the employee, thereof 50% to be recovered by the government
- Mode E: Business interruptions due to demand drop – 60% of salary to be paid to the employee, thereof 50% to be recovered by the government
Government payments for care-givers (e.g. parents taking care of their children and, thus, being unable to work) have been enlarged.
Other Measures to support Czech companies
- Corporate Income Tax advance 2020 due on 15 June has been pardoned.
- The general deadline for filing the 2019 individual income tax return is 1 April 2020. However, no penalty and late-payment interest will apply, as long as the tax return is filed by 1 July 2020. This measure will effectively permit taxpayers to defer without sanctions the individual income tax filing and payment deadlines by 3 months. Taxpayers will not be required to demonstrate that the delay was caused by COVID-19.
- The overpayment arises on the day on which the return is filed, and if the section in the return concerning overpayments is filled and signed, it will be refunded within 30 days.
- In the case of other late tax filings, including the late filing of the control statements, taxpayers will not be subject to penalties, provided that they can demonstrate that the delay was caused by COVID-19 (e.g. illness or quarantine in connection with COVID-19).
- All taxpayers will be exempt from the second penalty of CZK 1,000 for a late filing of the control statement, without the need to demonstrate the connection with COVID-19.
- Until now, neither the Ministry of Finance, nor the Customs Administration nor the Czech Statistic Authority have made public any information according to which reliefs would concern intrastat. Obligations connected with intrastat have thus not changed in any way for the time being.
- Although the final stages of the electronic reporting of revenues (ERR) will still be introduced from 1 May 2020, the tax authorities will be more lenient in cases of non-compliance, where such non-compliance was demonstrably caused by COVID-19.
- All self-employed persons (who perform their activities as main or supplementary) will not have to pay advances for social security during the period from March to August 2020
- From 16th March 2020, entrepreneurs affected by coronavirus can request an interest-free loans provided by Českomoravská záruční a rozvojová banka, a.s. (“ČMZRB”) The purpose of the “Úvěr COVID” (Loan COVID) program should be providing immediate cash to micro, small and medium entrepreneurs whose economic activity has been limited as a result of COVID-19. Entrepreneurs can use the loan for standard operational expenses, such as payment of business-contractual obligations, purchase and financing of supplies, payment of salaries to employees or purchase of small assets.
- Credits amounting to CZK 500K – CZK 15M can be requested by filing a request via the ČMZRB electronic registry, with a maturity over a period of up to 24 months and the possibility to postpone repayments by up to 12 months. More information on the conditions for provision or eligible expenditure is stated on the ČMZRB webpages (www.cmzrb.cz/podnikatele/uvery/uver-covid).
The government is negotiating the extension of these credits so that they may be provided also
by commercial banks.
On 31 March 2020, the Ministry of Finance announced that interests for late-payment regarding the road tax advance payments due on 15 April and 15 July 2020 will be waived, if the payments are made by 15 September 2020 at the latest.
