Advised support for selected members and executives of certain limited liability companies (s.r.o.) and other support for employers

After its meeting on Monday, April 27, the government announced that, in addition to the self-employed, it also intends to support shareholder/members and executives of some limited liability companies. It also announced the approval of its intention to defer employers' payment of social security contributions for employees and the extension of the Antivirus programme.

Business support through means of limited liability companies (see also article here)

Yesterday, the government discussed a proposal submitted by the Ministry of Regional Development to provide support in the amount of CZK 500 per day for executives and shareholder/members of one-member or two-member limited liability companies. It also received requests that warned that many citizens do business through small s.r.o. companies and not as a self-employed person, so they will not be able to reach for government aid from the "Twenty-Five" programme or the Antivirus programme.

The support should take the form of a subsidy, which should be provided under similar conditions as a compensatory bonus for the self-employed. The government should discuss the specific form of the proposal again on Thursday, April 30.

The intention is that it will not be possible to draw this subsidy together with the "Twenty-Five" or the Antivirus programme.

Those entitled to support under these new provisions will be the executives of one-member or two-member s.r.o companies., if they are the sole executives, and the members of these s.r.o companies. The condition is a place of permanent residence in the Czech Republic.

The possibility to draw subsidies should apply only to executives and members of s.r.o. companies without employees who are not in bankruptcy or liquidation at the time of application. The possibility to draw subsidies should be subject to other conditions, such as:

  • the company achieved a minimum turnover of CZK 80,000 in 2019 or CZK 20,000 in the first quarter of 2020
  • neither the company nor the applicant has any debts concerning taxes or social and health insurance debts
  • neither the company nor the applicant is registered among unreliable payers according to the Value Added Tax Act.

The subsidy will be provided in the amount of CZK 500 for each day of the relevant period from 12 March 2020 to 8 June 2020, in which all conditions will be met.

We will bring you more information about the specific wording of the proposal and the conditions for drawing the subsidy after Thursday's government meeting.

Postponement of employers' social insurance contributions

The government also discussed a proposal to defer social security payments for May, June and July, which employers pay for their employees. This is a measure that employers have been calling for from the beginning. Employers will not be exempted from insurance premiums, but will be able to defer social security payments for employees in the amount of 24.8% of the employee's earnings until September 20, 2020.

The deferral of payments should therefore, for the first time, concern the payment of premiums for May, which is normally due in June. It will take place automatically so that the employer does not pay this premium in the usual terms. Therefore, no application will be required. During the deferral period, the employer will pay interest on the deferred payment corresponding to 4% p.a. If the employer paid the premiums only after September 20, 2020, the standard default interest will continue to accrue 16% p.a.

The proposal does not concern the payment of health insurance premiums or premiums which the employer deducts and pays from the salaries of employees. You will need to continue to pay in normal terms.

Antivirus programme extension

Yesterday, the government also approved the extension of the Antivirus programme until May 31, 2020. The Antivirus program aims to support job retention, even if employers' activities are subdued or interrupted due to coronavirus measures. The Minister of Labor and Social Affairs, Jana Maláčová, stated that she was considering another extension, for a total of up to 6 months. However, the aim will be to support those companies that are still active or starting up business. The conditions for a further extension will be further discussed.We will also inform you about the further course of negotiations on the Antivirus programme on our blog.