CORONAVIRUS: Legal implications for businesses in the Czech Republic

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.

On 2 June 2020 an amendment to the Compensation Bonus Act was published in the collection of laws, thanks to which, in addition to self-employed persons, some shareholder/members in limited liability companies will also receive this support. Financial offices should commence paying out the bonus to shareholders on the basis of submitted applications no later than 3 June 2020, i.e. the date of effectiveness of the legislative amendment. The amendment was approved in its original wording, as the Chamber of Deputies overruled the changes suggested by the Senate.  

The state contribution for commercial rents to entrepreneurs with forcibly closed establishments is gaining more concrete outlines. If an entrepreneur negotiates a 30% discount on rent from his landlord, he will be able to apply for state support in the amount of 50% up to a ceiling of CZK 10 million for the period from April to June. However, the program has yet to be notified to the European Commission before it can be launched.

At its meeting on 18 May 2020, the Government approved by Resolution No. 553 the Covid III guarantee program for self-employed persons and companies employing up to 500 employees. Immediately afterwards, the websites of Českomoravská záruční a rozvojová banka, a.s. ("ČMZRB") published the conditions of the program. Entrepreneurs can already start loan negotiations with a commercial bank involved in the program. According to the experience of previous Covid programs, it is necessary to act quickly.

The Chamber of Deputies approved an amendment to the Compensation Bonus Act, thanks to which, in addition to self-employed persons, some shareholder/members in limited liability companies will also receive this support. As both the Chamber of Deputies and the Senate discussed the amendment in an abridged procedure, its approval was expected at the beginning of the Senate meeting on 13 May 2020. However, due to their formal designation of the compensation bonus payments, with respect to the budget, the Senate returned the amendment to the Chamber of Deputies with an amendment.

On May 7, 2020, an amendment the Act on Compensation Bonus for self-employed persons, the so-called Twenty-five, was published in the Collection of Laws, this act aims to support self-employed persons whose business has been negatively affected in connection with the spread of infection by coronavirus. The amendment referenced extends the possibilities to apply for a bonus of CZK 500 per day also for an additional period from 1 May to 8 June 2020. The Financial Administration has for this purpose issued a new interactive online application form.

On May 7, 2020, the Government approved under bill no. 234/2000 the amendment of the Compensation Bonus Act, which introduced another instrument of support for self-employed persons whose business was negatively affected in connection with coronavirus. This extends the period for which the self-employed will be able to claim a bonus. Applications for bonuses for the period from March 12 to April 30 can be submitted by the self-employed already from 10 April 2020. In the event that self employed persons are interested in extending the compensation bonus support for the additional time period from May 1, 2020 to June 8, 2020 they will have to submit a new application. For those who have not yet applied for the first bonus period, then from May 7, 2020 onwards it is possible to submit both applications (for bonus periods one and two) on the one single interactive formula which the Financial Administration has published.

On Monday, 4 May 2020, the government submitted an amendment to the Compensation Bonus Act to the Chamber of Deputies. The amendment should support, in addition to self-employed individuals (sole proprietors), certain shareholders in limited liability companies. This article provides details on the requirements, forms of application, and the amount of compensation.

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.

The government has started the announce the dismantling of certain Covid19 measures and from Monday, April 27, 2020, it now allows business trips for foreigners to the Czech Republic, in respect of which  entrepreneurs have been repeatedly demanding. However, it set a number of conditions and rules. 

The new COVID Prague program focused on business activities in the Capital City of Prague followed the fate of its predecessors COVID I and COVID II. This means that the available funds were exhausted on the same day as the receipt of applications, which thus ends. The COVID I and COVID II programs are also exhausted. Entrepreneurs thus have no choice but to wait for the announcement of the conditions of the COVID III program. What should be its parameters?

As of April 1, 2020, self-employed persons (“self-employed persons”) can file applications for so-called carer allowance benefits at the Trade Licensing Office in the amount of CZK 424 per day. However, it is not a special social benefit, as initially envisaged, but a State aid in the form of a grant with a stricter regime. Below is a brief overview of the conditions for obtaining this form of assistance.

On 14 April 2020, the Act on Compensation Bonus for self-employed persons, the so-called Twenty-five, was published in the Collection of Laws, which aims to support self-employed persons whose business has been negatively affected in connection with the spread of infection by coronavirus.

On 20 April 2020, the Government approved the amendment of the Compensation Bonus Act, which was published in the Collection of Laws on 14 April 2020 and, with effect from 15 April 2020, introduced another instrument of support for self-employed persons whose business was negatively affected in connection with coronavirus. This extends the period for which the self-employed will be able to claim a bonus. This article sets out for whom the support is designated, what form it will take and what you need to do to obtain it. Applications for bonuses for the period from 12 March to 30 April can be submitted by the self-employed already from 10 April 2020. It is important that if self employed persons are interested in extending the compensation bonus support for the additional time period they will have to submit a new application.

The Compensation Bonus Act was published in the Collection of Laws on April 14, 2020, which provides another support tool for self-employed persons whose business has been negatively impacted by coronavirus spread. Based on a number of comments, the original government proposal from the Ministry of Finance has been revised to expand the range of potential applicants. This article sets forth for whom the support is targeted, what form it will take and how to apply for it. Although the law came into force on 15 April 2020,  since Friday 10 April entrepreneurs can submit relevant applications.