As part of the so-called Liberation Tax Package I and II, the government approved reliefs in the area of filing tax returns and paying taxes.
All income taxpayers, who are generally required to file a tax return for corporate income tax, personal income tax and withholding tax settlement for the period of 2019 by 1 April 2020, are allowed to file it until 1 July 2020. The same extension applies to the payment of the tax surcharge (doplatek daně). This measure will relieve especially self-employed persons, small and medium-sized companies (without a mandatory audit of financial statements) and high-income employees who are obliged to file a tax return due to a solidarity tax.
At the same time, all taxpayers who pay quarterly or semi-annual income tax advances were generally waived the payment of the advance due in June this year. The June deposit (ie the second deposit for quarterly payers and the first deposit for half-yearly payers) will not be paid at all. The waiver of the deposit does not waive the tax itself.
VAT inspection report and return fines
If it is not possible to submit a VAT inspection report within the deadline, the fines for its late submission will be resolved as follows:
- Without a request from the tax administrator, fines for late submission of an audit report in the amount of CZK 1,000 incurred for the period from 1 March to 31 July 2020 will be automatically waived.
- Some additional fines for late control reporting during this period will be waived at the payer’s individual request for coronavirus related reasons.
If the VAT return is submitted late, the procedure will be as follows:
In addition to the waiver of fines for late-filed tax returns widely introduced for all tax subjects under the conditions mentioned above, there is an automatic waiver of fines for late tax claims also for taxpayers who were at least partially exempted from fines for failure to file a control report (10, 30, CZK 50,000) for reasons related to the spread of coronavirus. This is provided that this late tax return will be filed no later than the day on which the related late audit report was filed.
Real estate acquisition tax
A similar area relief was introduced in relation to real estate acquisition tax. Declarations for this tax, for which the three-month filing period expires between 31 March and 31 July 2020, will be possible to file without penalty and pay the related tax until 31 August 2020. In practice, this applies to transfer of the real estate to the real estate cadastre that was carried out in the period from 1 December 2019 to 30 April 2020.
Advances for road tax, which are legally due on 15 April 2020 and 15 July 2020, will again be possible to be paid without any penalties at the latest together with the third advance due on 15 October 2020.
Deferral of rent for business premises
Deferral of rent for business premises applies to the lease and sublease of premises if the purpose of the lease is the operation of a business or lease. During the protection period (according to the wording of the draft law until 31.12.2020), the landlord cannot unilaterally terminate the lease only because the tenant is in arrears with the payment of rent if the delay occurred at the relevant time (from 12.3.2020 to 30.6.2020) as a result of the emergency measures during the epidemic.
If the tenant does not pay all debts within the protection period, or if the tenant notifies the landlord that he/she will not pay the debts during the protection period, the landlord will be entitled to terminate the lease with a notice period of 5 days.
Within 15 days from the date of the first delay, the tenant is obligated to submit documents to the landlord proving that the delay is the result of a restriction resulting from emergency measures during the epidemic, which prevents or significantly complicates the operation of the tenant’s business.
Further information can be found here: //expat.praha.eu/deferral-of-rent-payments-for-entrepreneurs/
Prague waives fees for restaurant front gardens
Until the end of the year, no rent or local fees will be charged for the placement of restaurant gardens. Prague will also waive fees for the use of public space enabling street sales in front of the establishment. The exemption of the local fee and rent will also apply to outdoor markets, including farmers’ markets. The measure applies broadly to all establishments that are on the City’s property until the end of the year.
However, relief for street sales will include technical constraints. For example, maintaining safe passage on the sidewalk, maintaining cleanliness, or the need to assemble everything in the evening for road cleaning will be required.
Further information can be found here: //expat.praha.eu/prague-waives-fees-for-restaurant-front-gardens/
In the accelerated regime, the government passed a special law with time-limited effects which suspends the obligation to register sales for entities falling into all phases of EET for the duration of the emergency and for the following three months from its termination.
In practice, this means that entrepreneurs in this period do not have to send sales data, issue EET receipts, or post an information notice about the obligation to record sales at the establishment.
Please note, however, that the obligation to issue a proof of purchase upon request under the Consumer Protection Act continues to apply.
The new law on the credit moratorium designed by the Ministry of Finance makes it possible to postpone the repayment of loans and mortgages at any bank and non-bank provider for up to half a year. Repayments can be postponed by ordinary consumers, self-employed persons and companies. Repayments will be deferred from the first day of the month following a notification to the creditor and a declaration that the reason for taking this step is due to the negative economic impact of the coronavirus pandemic. However, these reasons will not have to be proved and the creditor will not examine them.
What instalments can be postponed?
- Repayments can be deferred for consumer and business loans that were agreed and drawn before 26 March 2020;
- For mortgages, repayment can be deferred only for contracts concluded before 26 March, but they can still be drawn after this date.
The deferral under the statutory moratorium regime applies to loans and mortgages with any bank and non-bank provider. The option to defer repayments does not apply to credit cards, overdrafts and revolving loans, operating leases or loans in connection with capital market transactions. At the same time, repayments are not deferred for loans which were in arrears for more than 30 days as of March 26, 2020.
How long can the repayments be postponed?
The first payment will be deferred in the calendar month following the month in which the deferral will be announced. Therefore, if you announce the postponement of the instalment in April, your instalments will be postponed from May. If you announce the postponement in May, your payments will be postponed from June.
Repayments can be deferred either until the end of July 2020 or until the end of October 2020. The repayment period shall be adequately extended, principally by the period of the deferral. It is also necessary to take into account that the repayment schedule will also be extended by the amount of interest that will accrue during the grace period – this would be calculated by a bank or non-bank lender.
Interest during the deferral
During the deferral period, the debt will continue to bear interest under the contract. Companies will pay this interest continuously even during the deferral of the principal payment. On the contrary, the consumer and the self-employed will pay it later, only after the full principal has been repaid. In addition, the rise of the interest rate for consumers is limited. To date, the interest rate is capped at 9%. Interest accrued during the deferral of repayment will not affect the repayments – these will remain at the originally agreed amount, only the repayment period will be recalculated.
No fees or negative entry in the register
Postponement of instalments under the statutory moratorium regime is free of charge and will not lead to a negative entry in the debtors’ registers, so there is no need to worry that any further loan applications will be complicated due to a delay in the future.
The help is designed for small entrepreneurs damaged by the COVID-19 pandemic, who have chosen the form of s.r.o. in their activities. Indeed, their business is often not very different materially from the self-employed, who already obtain state support,
Following the example of the Compensation bonus for self-employed persons (Pětadvacítka), the direct support will be paid in the form of a compensatory bonus of CZK 500 per day for the total period from 12 March to 8 June, i.e. a maximum of CZK 44,500. The program will be administered and paid by the Financial Administration, which has began accepting applications.
Whom is the support intended for?
The aid is aimed at active partners at the head of small s.r.o. companies, not for companies as such, nor passive investors. If the applicant is a partner in several companies in which he fulfils the conditions of the program, he will be entitled to support only once.
The support is intended for s.r.o. companies:
- with a maximum of two partners, where both can apply for the support, or
- with several partners who are members of the same family (direct kinship, sibling, spouse or partner under the Registered Partnership Act), in which case all partners can apply for the support.
However, the applicant cannot be an employee participating in sickness insurance at the same time (except for employment in the company, e.g. a contract as an executive, or an employment contract) and cannot draw an Antivirus (so-called kurzarbeit, or short-time working) contribution during the given period. Furthermore, the applicant cannot already draw the bonus from the title of a self-employed person. The right to apply for this financial support does not arise for partners in companies that were in bankruptcy, in liquidation or an unreliable payer (unreliable person) under the VAT Act during the bonus period.
The minimum provable turnover of the company will have to be CZK 180,000 for 2019 or the assumption of achieving such a turnover in 2020 or 2021. The company must also be a tax resident of the Czech Republic, the European Union or the European Economic Area. The applicant himself must then be an active partner of the company as of 12 March.
How to apply?
Applicants for a compensation bonus from among the partners of s.r.o. fill in a simple form, state the bank account in Czech currency and the identification of the company and send the application to the relevant tax office. The application can also be submitted simply by e-mail and attaching a scanned application with a handwritten signature.
The right to the payment of the bonus arises by signing an affidavit stating that in each calendar month for which the bonus is claimed, there was a day when the applicant’s activities could not be performed as usual due to the spread of coronavirus or crisis measures. Examples of such restrictions are the need to close or restrict an establishment, quarantine or care for the child of the applicant or his employee, limited demand for products and services or limited supply needed to carry out the activity.
It will be possible to claim a compensation bonus of CZK 500 per day if the legal conditions are met, both for the first bonus period from 12 March to 30 April 2020 and for the second bonus period from 1 May to 8 June 2020. Therefore, it will be possible to apply for the maximum amount of CZK 44,500. The application for the compensation bonus must be submitted separately for each bonus period (still on the same paper), no later than 60 days after the end of the relevant bonus period.
You can find the application form here (Czech only): //www.financnisprava.cz/cs/financni-sprava/media-a-verejnost/nouzovy-stav/Pomoc_spolecnikum_malych_sro/Zadost_pro_sro/Zadost-interaktivni_PDF
You can also apply via the application here (Czech only): //ouc.financnisprava.cz/kompenzace/form/bonus