The government approved tax mitigation measures related to the effects of government measures - UPDATE1
The Czech Ministry of Finance has expanded the scope of parties which are subject to the tax relief of 14 October 2020 that relates to the ban on certain operations due to the current epidemiological situation and the growing spread of coronavirus. We previously outlined these measures in greater detail HERE. Who does the tax relief benefit?
The government has once again tightened restrictions on the free movement of persons and the retail sale and provision of services
With respect to the deterioration of the current Covid-19 epidemiological situation, the Government of the Czech Republic has issued crisis measures tightening the current ban on the free movement of persons, with effect from 28 October 2020 from 00:00 to 3 November 2020 at 23:59 and the ban and restrictions retail sales and sales and provision of services from 28 October 2020 from 00:00 to 3 November 2020 23:59.
On 14 October 2020, the Government of the Czech Republic approved the extension of Category A of the Antivirus program until the end of 2020. With the extension of Category A, there is also an increase in support for employers whose operations have been forcibly restricted. The extension of Category B until the end of 2020 was also approved on 26 October 2020.
Restricted entry of foreigners to the Czech Republic in connection with restricted free movement of individuals
On 21 October 2020, the Czech Government adopted Resolution No. 1078, which introduced restrictions on free movement of individuals, with exceptions set out in the Resolution. As a result, arrival of foreigners in the Czech Republic was restricted and is subject to certain requirements outlined below.
In recent days, the Government of the Czech Republic has decided on individual programs to support businesses and other entities as a result of the coronavirus epidemic. Below is a brief overview of the individual programs, which were announced mainly on 14 October 2020, 16 October 2020 and 19 October 2020. The government has not yet published the specific conditions of the Antivirus program, the Caregiver’s Program for the “self-employed” and the conditions of the compensatory bonus.
In response to the growing spread of coronavirus, the Czech government approved a proposal to renew the compensation bonus for self-employed individuals, shareholders of small limited liability companies, and individuals who work under non-employment agreements in business sectors that have been directly affected by the government bans under the emergency measures. Moreover, the government approved that the electronic records of sales (EET) will be postponed until 1 January 2023.
The government has approved some tax mitigation measures related to the effects of government measures
In connection with the ban on certain activities due to the current epidemiological situation and the growing spread of coronavirus, the Ministry of Finance has issued several measures in the area of taxation, which it describes as a large liberation tax package. In fact, the scope of these mitigation measures is very small, both in terms of the tax obligations it is intended to relieve and the range of persons concerned.
On 12 October 2020, the Government of the Czech Republic announced new crisis measures, which tightened the ban on mass events, banned the public's presence in the interior of restaurants and catering establishments and restricted the operation of shopping centers. Among other things, the government restricted the functioning of schools (excluding kindergartens) and imposed work duties on students of selected universities and secondary schools. These crisis measures are generally effective from 14 October 2020 to 2 November 2020.
In connection with the deteriorating epidemiological situation of Covid-19, the Government of the Czech Republic issued a set of crisis measures, with effect from 12 October 2020 from 00:00 to 25 October 2020 23:59, concerning in particular the gathering of persons and restrictions and performance of certain business activities.
The Government of the Czech Republic declared a state of emergency on 30 September 2020 with effect from 5 October 2020. At the same time, it has already set specific restrictions. What are these restrictions? Is anyone restricted in their profession? Are general meetings allowed? And what are the sanctions? We have prepared a short overview for you.
Abolition of real estate acquisition tax, exemption from income tax from the sale of real estate after 10 years
On 25 September 2020, Act No. 386/2020 Coll was published in the Collection of Laws, which definitively abolished the tax on the acquisition of real estate. It also includes several changes in the Income Tax Act. The topic has been heavily publicized since the beginning, and political negotiations took place during the legislative process, and the law thus underwent a number of changes compared to the original government proposal. Therefore, we briefly summarize the final form of the adopted fundamental measures.
Category A and B have now been extended until the end of August 2020 and the government has approved a new form of support – Category C!
On 16 June 2020, the Chamber of Deputies of the Parliament of the Czech Republic, after being returned by the Senate, approved a law from the Ministry of Labour and Social Affairs ("MLSA") containing another form of targeted support for some smaller employers trying to maintain employment despite the difficult situation. This takes the form of a waiver of social security contributions for employees in employment for the period from June to August 2020. The law was approved in the original version of the government proposal, the Senate's amendments were not adopted. The Act was signed by the President of the Republic on 19 June 2020 and is now awaiting publication in the Collection of Laws.
Tax returns for personal and corporate income tax can be filed without a penalty until 18 August 2020. Likewise, the income tax calculated under such returns will be payable until 18 August 2020. However, this option does not apply to entities which report to the Specialized Tax Authority. Natural persons can file a notification of exempt income in excess of CZK 5 million until 18 August 2020. The deadline for filing employment income tax statements was prolonged to 31 May 2020.
The Czech Finance Minister’s decision published in Financial Bulletin 9/2020 provides for postponing the filing of real estate acquisition tax returns (which were otherwise due to be filed on 31 March 2020 or later) and paying the related real estate acquisition tax until 31 December 2020. The reason is that the tax is expected to be abolished retroactively.