CORONAVIRUS: Legal implications for businesses in the Czech Republic

The government has approved additional tax measures designed by the Ministry of Finance to help taxpayers overcome the current situation caused by the spread of the coronavirus. The new tax measures were officially published on 31 March 2020 in the Financial Newsletter. What do they relate to?

General questions with respect to the impact of extraordinary measures on contractual relations have been mentioned HERE, in relation to financing contracts there are certain specifics, the basic outline of which is set forth in this note. In addition to arrangements between suppliers and customers, financing contracts are another cornerstone of any business and private life, so due attention should be paid to them in times of emergency measures so that the particular entities have not lost access to financing of their business and other activities.

Like other taxpayers, landlords are currently exposed to various economic pressures. On one hand, they have to cover the expenses related to their property, but on the other hand they often do not receive rent from tenants who have had to restrict their operations because of the government measures against the coronavirus. What should landlords keep in mind in this situation?

While stock exchanges worldwide have experienced dramatic downturns and the economy is apparently heading for a global recession, supervisory organs are taking measures to respond to the situation by means of financial market regulation. In this regard, we consider the most important measure so far to be the shifting of financial reporting deadlines by the European Securities and Markets Authority (ESMA), however also significant are the recommendations of ESMA and the European Banking Authority (EBA) on the impact of the coronavirus epidemic on accounting, respectively its impact on the qualification of financial instruments, which is an issue that issuers of securities admitted to trading on regulated markets (as well as financial institutions) will have to deal with in preparing annual reports.

Aid for self-employed persons ('self-employed') and small and medium-sized enterprises ('SMEs') affected by anti-coronavirus measures pursuant to the Czech Government’s  'COVID GUARANTEE' programme was exhausted in one day. On Monday, March 30, 2020, the terms and conditions of the follow-up COVID II program will be published, in which CZK 5 billion should be available. The rush of applications is expected, so action needs to be taken quickly and not delayed. 

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.

VAT payers, who have monthly obligations, may no longer be oriented in the flood of newly adopted tax measures to help taxpayers to overcome the current situation caused by the spread of the coronavirus. For this reason, we provide a brief overview of the tax measures specifically related to VAT and add some important remarks that should be kept in mind.

Currently, when measures are being taken due to the coronavirus epidemic, a number of questions arise regarding the payment of social security and health insurance premiums. In addition, self-employed persons are resolving, for example, how the permitted late filing of income tax returns will affect the deadline for submitting an overview of income and expenditure for 2019 and the payment of insurance premium supplements and other advance payments.

The set of several emergency measures of the Ministry of Health dated 23 March 2020 banned the retail sale of goods and services, banned the public presence at selected premises or selected times, prohibited the operation of certain premises, prohibited the free movement of persons or restricted the activities of public authorities and administrative bodies.