4th December 2020

Government Measures Supporting Business

Government measures supporting business, COVID-19, as of December 3

 

economic measures supporting business approved by czech authorities (valid)

PES (5-Stage system indicating measures in effect) FOR BUSINESS STAGE 3 (ORANGE) IN PLACE AS OF DECEMBER 3

 

 

COVID III loan guarantee program approved.

The Government approved the COVID III loan program. The program allocates CZK 150 billion for state guarantees on loans to approximately 150,000 entrepreneurs and companies. The Czech-Moravian Guarantee and Development Bank is  the guarantee institute. The government estimates that CMZRB will be able to guarantee loans for up to CZK 500 billion in total. Commercial banks, which will provide the loans, have not given an estimate of volume or number of loans COVID III will cover. CMZRB signed cooperation contracts with the interested commercial banks on May 28.

Companies with less than 250 employees are eligible for a loan guarantee of 90% of the total loan (with a maximum guarantee of CZK 45 million), and businesses with 250-500 employees can receive a loan guarantee of 80% (max. CZK 40 million). The Government approved on October 16 the amendment to the act on the provision of state guarantees enabling the extension of the Covid III program until the end of 2021. The purpose of loan has been extended to cover non-operational costs, including investment  (originally, it was only operational costs). The bill was signed by the President.

The right to a state guarantee has been extended from June 30, 2024 to April 30, 2026. If approved by the European Commission, the state guarantee will be applied on CMZRB loans agreed before December 31, 2021.

“Guarantee Covid Plus” program for 250+ employees´ companies.

The Parliament approved an amendment to Act on Insurance and Export Financing which turns EGAP into a guarantee institution. EGAP will now be able to provide "Guarantee Covid Plus" program for companies with 250+ employees. The bank will be able to guarantee loans not only for exporters, but also for manufacturers, sales-oriented businesses, and, in general, for businesses with 250+ employees (but can decide not to provide the loan). The maximum volume of insurance is CZK 330 billion. As a consequence, the Finance Ministry increased the State Budget for 2020.

On May 5, the European Commission  approved an approximately €5.2 billion (CZK 142 billion) Czech guarantee scheme for large companies with export activities affected by the coronavirus outbreak. The support, in the form of State guarantees on loans, will be accessible to large companies whose exports represent at least 20% of their yearly sales revenue.

The scheme aims at limiting the risk associated with issuing loans to those exporting companies that are most severely affected by the economic impact of the coronavirus outbreak, thus ensuring the continuation of their activities. The scheme will be managed by the Czech export credit agency EGAP. The guarantees will support lending to those companies, but will not take the form of export aid contingent on export activities as it is not tied to concrete export contracts. 

new state guarantee for business loans.

The Parliament approved the Ministry of Finance draft Act on Provision of State Guarantee for Securing CMZRB Debts which permits a flat guarantee by the state for debts. Companies with up to 250 employees would be entitled up to a 90% guarantee by the state for operational debts. For companies with 250-500 employees, the state guarantee would amount to an 80% guarantee for operational debts. Both guarantees would be capped at a maximum debt of CZK 50 million (CZK 45 million for smaller, CZK 40 million for bigger businesses). A portfolio of  guarantees totaling CZK 150 billion would be distributed among the commercial banks by the CMRZB. The state will thus guarantee 30% of the total amount of the loans provided by the commercial banks (CZK 600 billion). The bill was approved by the Parliament and signed by the President at the end of April.

COVID Praha support for Prague SMEs.

Prague City Council approved the Agreement on the Establishment and Administration of the COVID Guarantee Fund Praha 2020, concluded by the City of Prague, the Czech-Moravian Guarantee and Development Bank (CMZRB) and the Ministry of Industry and Trade. The new economic support instrument COVID Praha for SMEs business will transfer CZK 600 million from the EU Operational Program PPR (OP Praha - Pol rustu CR) to CMZRB. CMZRB will then provide guarantees for commercial bank loans together with a financial contribution for interest payments. The condition will be the same as the COVID II program. The program was launched on April 20. Application should be submitted starting April 21.

On July 8, Prague City Hall decided to add further CZK 46 million to the guarantee fund, increasing the total amount of funds available to Prague entrepreneurs to CZK 646 million. The application can be submitted by December 31, 2020 or until the amount of guarantees has been reached (CZK1.5bn). More.

Prague business support by the City of Prague.

Prague Councillors decided to waive all local fees and rents paid for using public space as restaurant gardens or farmers' markets until the end of the year 2020. The amount of waived fees and rental charges will exceed CZK 200 million. Prague will simplify the application procedures. Prague representatives also waived the local residence fee for entrepreneurs providing accommodation in lodging houses, spa facilities and school accommodation facilities during the state of emergency. Prague will waive the local hotel fee until the end of 2020.

tax liberation packages.

Package 3: On June 9, the Minister of Finance signed a third tax liberalization package. In the package, the deadline for filing an income tax return was postponed from July 1 until August 18. VAT waivers for free-of-charge supplies of protective equipment was extended until July 31. The Ministry of Finance also postponed until December 31 the obligation to file an immovable property return and pay tax on the acquisition of the immovable property. Default interest will be waived until December 31. 

extended Tax Liberation Package.

As of October 14, entrepreneurs whose activities were restricted by government emergency can defer their tax obligations (the affected entrepreneurial activities are listed by the Ministry of Finance). Payments of VAT, income taxes and road tax paid by entrepreneurs whose predominant activity falls into one of the fields explicitly targeted by government restrictions are now deferred automatically. Companies should send a notification to the Financial Administration that they meet the conditions of the General Pardon of the Minister of Finance. All measures currently valid are now unified within the "Large Liberation Package" (Velký liberační balíček).

On October 26, the government agreed to waive advances payable between October 15 and December 15 for personal and corporate income tax, advances for road tax payable on April 15, July 15, October 15 and December 15, and interest on late payments of VAT to all businesses affected by government crisis measures.

anti-crisis tax package, VAT reduction.

The Chamber of Deputies approved  an anti-crisis tax package.  VAT on tickets for cultural and sports events, festivals, theater performances, wellness centers and accommodation services was reduced from 15% to 10%. The road tax was decreased by 25% for vehicles with maximum weight of more than 3.5t and a loss carryback measure makes possible deducting loss in 2020 from the tax base in 2018 and 2019 if the business reported a profit during those years. The loss carryback measure is applicable to those companies that submitted tax return after July 1. The anti-crisis tax package was addressed by the Senate in the state of legislative emergency on June 10. The President signed the law. 

>> A summary of measures within the Government Tax Liberation Packages currently valid.

EET deferral extended.

The Ministry of Finance proposed the deferral of EET online registration of sales to be extended until January 1, 2023. This deferral would be applicable to professions included in all four stages of the gradual EET implementation (the third and fourth stage were never launched due to the pandemic). The Chamber of Deputies and the Senate passed the bill at the end of October 2020. The bill was signed by the President. More

The Ministry of Finance suspended the EET for the period of state of emergency in spring and the following three months, through legislative procedure. The proposal was approved by the Parliament and signed by the President. At the end of May the Parliament approved the Government´s proposal to defer all phases of EET until the end of 2020. 

Lex covid justice II.

The Chamber of Deputies approved re-introduced lex covid justice which was in effect during the first coronavirus wave in spring. A debtor who is an entrepreneur and was not insolvent before October 5 will be able to file a proposal for an extraordinary moratorium to the insolvency court until June 30, 2021. On October 29, the Senate returned the bill to the Chamber of Deputies with change proposals. The Chamber of Deputies overrode the veto and Lex covid II entered into effect on November 13. 

new call within COVID-Rent program announced.

New call was announced by the Ministry of Industry and Trade within the COVID-Rent program compensating commercial rents in the period July to September. 50% of the cost will be covered and paid out directly to entrepreneurs, this time without the need to ask landlords for cooperation and waiver. The call was launched on October 21 and will continue until midnight January 21, 2021. 

COVID-Tourism program for travel agencies and guides approved.

The Government approved COVID-Tourism for tour operators, travel agencies and guides. With a budget of CZK 500 million, the program will provide support to 1) tour operators up to 2.75% of their planned sales for this year, 2) travel agencies by CZK 500 for each trip (including spa trip) purchased between December 1, 2019 and October 1, 2020 which was cancelled due to the COVID-19 pandemic, 3) travel agencies providing inbound trips through a subsidy of CZK 50,000 if the agencies meet set conditions - their revenues in 2020 decreased by 50% annually, they have been operating on the Czech market for more than 3 years and its revenues in 2019 amounted to at least CZK 1 million, and 4) tour guides will be entitled CZK 40,000, with additional CZK 10,000 if they provide educational services to state school facilities for at least 10 hours or undergo retraining accredited by the Ministry of Education. 

COVID-Bus to compensate bus operators.

The Government also decided to compensate operators of irregular bus transportation (holiday trips, school excursions) for losses they suffered as a consequence of government counter-pandemic measures.The Ministry of Transport launched the call on October 26. Applications submission deadline is November 25, 2020.

Czech Trade services free of charge. 

Due to the current crisis, Czech Trade has extended period for which it provides its services free of charge, until March 31, 2021

Czech MFA offers new service "Obchodní cesty (Business Trips)".

On October 22, Czech Foreign Ministry opened new service "Obchodní cesty" for businessmen to help them with important business trips abroad, visa procedures, support with the arrival of key business partners from third countries, employment of foreign students etc. 

COVID-Sport 2 support program approved.

The Government approved another round of compensations for sports clubs and organizations that had to cancel competitions, events due to government counter-pandemic measures. More.

COVID-Culture 2 program opened.

New Covid-Culture call was announced on October 15 by the Ministry of Industry and Trade. On October 22, the Ministry of Industry and Trade launched a call for Covid-Culture 2 subsidies. Applications may be submitted via online form by organizations and entrepreneurs in cultural and creative industry who need to cover sunk costs of events canceled due to the government counter-pandemic measures. Starting on October 23, the Ministry has been accepting applications for a one-off support for OSVČ in cultural and creative-technical industry. On October 29, the Senate passed the bill allowing organizers of cancelled cultural events to provide vouchers instead of money refund until autumn 2022. 

The Chamber of Deputies also approved an amendment to the act on certain measures in the field of cultural events, which extends the period customers can ask for cultural vouchers for events that could not take place due to the emergency measures. Protection period has been extended to March 2022 and the customer can apply for a voucher until June 30, 2021. If the organizer of the canceled event has not issued voucher in a month after application was submitted or has not offered any alternative event within 6 months since the issue date of the voucher (until March 31, 2022), the protection period is canceled. The Senate passed the bill.

Covid-Culture 2 launched. 

The Ministry of Industry and Trade started to pay out support from the special program Covid-Culture, designed to support live art. The call has received a notification from the European Commission. Starting November 25, the total CZK 45 million for more than 750 applications will be distributed, followed by more applications coming in. The deadline for submitting applications has been extended until December 22, 2020. 

"Rozbalte to" support program for restaurants.
Ministry of Industry and Trade supported the project "Rozbalte to (Unpack it)" organized by mineral water producer Mattoni to help the restaurants limited by the Government restrictions.   

Prague to launch map of restaurants for affordable lunches.
The City of Prague decided to support Prague citizens and restaurants with the map of affordable lunches for children and senior citizens in the capital. The restaurants can register to the project from November 5 at obedyprodeti.praha.eu.

City of Prague approved cultural vouchers.

Prague City Hall approved cultural vouchers for tourists, primarly aimed at Czech citizens. Every tourist who spends more than one night in a hotel in Prague will receive bonus points which could be used in Prague sites such as zoo, botanical garden, Prague Gallery or Museum. According to the councillor Hana Trestikova (Praha Sobe), the program might be extended also on international tourists coming from the countries that will open their borders. 

In Prague as at Home to be extended

Prague City Council and Prague City Tourism plan to extend "V Praze jako doma" (In Prague as at Home) campaign to the end of 2020. The City plans to support Christmas Tourism in Prague and to launch special Christmas offers. 

financial support for culture sector.

The ministers approved the financial support package for culture sector amounting to CZK 1.07 billion, out of which independent art segment will receive CZK 440 million, CZK 300 million will go to the regional culture support and contributory organizations in the resort will receive CZK 300 million.

vouchers for cultural events

The Chamber of Deputies approved postponement of ticket refunds for international festivals. Ticket holders can ask for refund of the ticket only after October 31, 2021. Those who already have tickets for any of these festivals will be able to apply for a voucher which would enable them to attend the same event in 2021. The Parliament approved at the end of October extension of the option until autumn 2022.

Agricovid-Potravinářství subsidy to food industry.

On November 2, the Government approved a subsidy program Agricovid for companies in food and agricultural industry. The European Commission approved the subsidy program Agricovid for companies in food and agricultural industry in the total amount of CZK 3 billion. The companies can now receive subsidies up to 75% of revenue lost if that revenue decreased by at least 25% year-on-year between the beginning of March and the end of November. Maximum subsidies are set at CZK 200,000 per company and CZK 20,000 per employee. 

rural development program for agriculture.

The Government released CZK 3.3 billion for the 2020 Rural Development Program to help entrepreneurs in agriculture, food and forestry while fighting coronavirus crisis. The main reason for this support is ensuring the Czech food independence.

EC approved subsidy program Agricovid.

European Commission approved the subsidy program Agricovid for companies in food and agricultural industry in the total amount of CZK 3 billion. The companies can now receive subsidies up to 75% of revenue lost if that revenue decreased by at least 25% year-on-year between the beginning of March and the end of November. Maximum subsidies are set at CZK 200,000 per company and CZK 20,000 per employee. 

Option for investors to prolong investment incentives.

The Senate passed an amendment introducing the option to extend investment incentives provided to investors by five years. Extensions will be decided on a case-by-case basis. This applies to 101 projects worth CZK 60bn of investment. In 2019, the parameters of incentives were modified (specific regions, research and development projects/manufacturing with high value added, eligibility of small and medium sized businesses). The current proposal applies to all projects using investment incentives, including those supported prior to the 2019 change in parameters. 

 

Wider access to investment incentives proposed.  

The Government proposed better access to investment incentives for SMEs. The eligibility limit for small businesses would be CZK 20 million of investment (CZK 10 million in supported regions). For medium-sized businesses, the limit would be CZK 40 million of investment (20 million in supported regions). The limits for large companies would newly be CZK 80 million (CZK 40 million in supported regions). The proposal leaves out the strategic condition of investment of higher value added and the SMEs do not need to perform R&D to be eligible to apply for investment incentives.

Rise Up 2.0, Covid-19 research.

The Ministry of Industry and Trade decided to continue to support the program Czech Rise Up 2.0 which should focus on research and health care. The call for applications by entrepreneurs and research organizations is open from  November 18 until December 17, 2020. The support will be provided in the form of subsidy to cover eligible expenses incurred within the project. The maximum amount for one applicant per one project is CZK 10 million and the support rate is set at 75% of the eligible project expenditures. Applications can be submitted only through the data box of the Ministry of Industry and Trade, ID: bxtaaw4, questions at CzechRiseUp2.0@mpo.cz.

 

economic measures supporting business approved by czech authorities (lapsed)

guarantee COVID I program via the Czech Moravian Guarantee Bank

The initial COVIDI program has been replaced by the COVID2 program. The COVID1 program was suspended after the Czech Moravian Guarantee Bank received 3,200 applications. The COVID1 program applied only for companies with less than 250 employees. 

guarantee COVID II program through Czech Moravian Guarantee Bank, Prague companies excluded.

COVID2 program, providing interest-free credits by commercial banks, accepted 5,900 applications worth CZK 19 billion, average loan requested reached CZK 3 million. COVID2 relies on EU money, and one of the conditions set out in the terms is that the recipient must operate outside of the NUTS2 region of Prague. The Trade Ministry and City of Prague are currently discussing also support for Prague companies. First round of applications was closed on April 3.

tax liberation packages.

Package 1: The Ministry of Finance approved extension of the deadline for filing income tax return and tax payments for 3 months, until July 1, 2020; flat waiver of penalties for late filing of personal and corporate income tax returns and default interest until 1 July 2020; waiver of penalties for late VAT control reports and administrative fees, for the obligations arising between March 1 and July 31, 2020; deferred tax payment and waiver of fee for filing the request.

Package 2: Additionally to Package 1, the Ministry of Finance/ the Government approved a waiver of personal and corporate income tax advances paid in June (ie the second advance for quarterly payers and the first advance for half-yearly payers); flat waiver of penalty for late tax on acquisition of the immovable property return or late payment, for all late returns to be filed between March 31 and July 31, 2020; postponement of filing a immovable property tax return until August 31, 2020.

deferral of rental cost.

The Parliament agreed to amend the Acts on Certain Measures to Mitigate the Impact of COVID-19 Epidemic on Tenants of Business Premises and defer rental payments of commercial property/offices affected by the Government emergency measures from March 12, 2020 until June 30, 2020. Renters will have a protection period of 2 years lasting until March 31, 2022. During this protection period, the deferred rental payments must be repaid. Extension of this period by three months may be considered if necessary.

postponement of insolvency and bankruptcy.

The approved "Lex Covid Justice" will allow businesses to postpone the obligation to file for insolvency, temporary moratorium on debt enforcements, a waiver of statutory deadlines for completing certain actions. A debtor who is an entrepreneur and was not insolvent before the state of emergency March 12, 2020 will be able to file a proposal for an extraordinary moratorium to the insolvency court until August 31, 2020.

call for support to social service facilities.

On August 12, the Ministry of Labour launched a call for applications for co-financing incrased costs incurred by social services in connection with Covid-19 outbreak for the period March 13 to May 31. Applications in three areas of support (increased operating cost, financial resource outages, one-off compensation payment for employees) can be submitted by August 27. 

support for tourism sector.

The Parliament approved an amendment to Act on regulating the activities of travel agencies, the companies will be able to defer refund payments for travel services paid between February 20 until August 31, 2020.  The bill proposes an annual transitional period for reimbursement of already paid holidays, in which the travel agency will offer its clients a voucher for a package tour of the value of the package tour they have originally paid. The travel agency would only have to return the money in case the client will not use the voucher within 12 months.

call within COVID-Culture program opened.

The Government approved a subsidy program COVID - Sport, prepared by the National Sport Agency. The program will help the organizers of sport events, operators of sports facilities and sports organizations who have to pay rent for sports facilities.

call within COVID-Culture program opened.

Ministry of Industry and Trade in cooperation with the Ministry of Culture opened a call for COVID-Culture (COVID-Kultura) program for organizations and entrepreneurs in cultural and creative industry. Applications for expenses paid between October 1 and May 17 for the cancelled cultural events (planned to be held between March 10 and August 31) due to Government emergency measures can be submitted from August 18. The deadline for submission of application was extended to September 30.

subsidies for commercial rents "COVID-nájemné".

The Government approved a voluntary subsidy for commercial rents of entrepreneurs whose establishments closed due to the Government restrictions from March 12.. If the landlord waives 30% and the entrepreneur pays 20%, the state will cover up to 50%. The measure is applicable from April 1 to June 30. The companies will have to prove that their lease agreement was concluded before March 12. Entrepreneurs who had to limit their operations- e.g. they had to sell through take-away window, delivery or e-shop- will also be able to apply for support. The entrepreneur or small business cannot be personally or legally related to the landlord. The amount covered by the state is capped at CZK 10 million per company. In case of the premises rented by the state, the companies will pay 20%, and the state will subsidize 80%. The measure is applicable for rents in April, May and June. The deadline for applications is September 30.

The application for support for commercial property owned by Prague could be submittied here.

The Call for COVID-nájemné was published on June 19, the applications could be submitted from June 26. More information on call to be found here.

program Covid-Spa (Covid-Lazne) receives notification from EU. Call for support launched.

On August 11, the Ministry of Regional Development received a notification of the European Commission on subsidy programme Covid-Spa (Covid-Lazne) which will increase the volume of spa vouchers. A call for applications should be opened this week. The total amount of subsidies should reach CZK 1 billion (250,000 vouchers).The deadline for applications is September 30, 2020.

support for small business (1-2 persons s.r.o.).

The financial support for 1 to 2-person SMEs s.r.o. in the amount of CZK 500 per person per day, for the period of March 12 until June 8 was signed by the President. The minimum turnover of the company has to equal CZK 180,000 per year (CZK 15,000 per month). The total amount of the financial support can total CZK 44,500 per person. Applicants cannot be registered for the self-employed support program "Petadvacitka" or participate in the unemployment support program Antivirus.

support for agriculture "Provoz 2020".

The Ministers also discussed and approved  conditions of the Support and Guarantee Agricultural and Forestry Fund program "Operation 2020 (Provoz 2020) - reduction of the loan principal sum". The program is intended for small and medium-sized entrepreneurs in the field of primary agricultural production, who have recorded losses due the COVID-19 pandemic. The companies will be able to apply for financial support in the maximum amount of CZK 150,000, which may not exceed 50% of the outstanding loan principal. The deadline for submission of applications is September 30.

call for compensation of increased operating expenses in social service facilities opened. 

The Ministry of Labor and Social Affairs opened a call for extraordinary subsidy program for 2020 to finance increased operating expenses and financial compensation of revenue shortfalls resulting from the adoption of quarantine measures, extraordinary and/or emergency measures in social services due to the Covid-19 epidemic in the perdio between March 13 and September 30. The deadline for submission of applications is October 26. 

COVID-Accommodation support program - deadline for application submission is November 3. 

COVID-Accommodation program was launched in order to compensate accommodation providers that had to close their operations due to government counter-pandemic measures in the period March 14 to May 24, 2020. The deadline for submission of applications for compensation was October 30, extended to November 3. The European Commssion approved the measure on August 21. Accommodation facilities, based on the category, are eligible for a compensation of CZK 100-330 per room per day.

opt-In deferral of loans and mortgages until end October.

The measure allows the payment of loans and mortgages signed before 26 March 2020 to be deferred for three or six months depending on the payor's choice. This deferral includes interests, with the exception of corporations. The measure is binding on all banks and non-banking companies.

 

Members of the American Chamber of Commerce in the Czech Republic