2nd May 2017

Czech Legislation Update April 2017

Czech PM B.Sobotka announced on 2 May 2017 that his Government will resign due to controversies around Finance Minister A.Babiš. PM Sobotlka is ready to submit the resignation to the President of the country M. Zeman.


On April 1, amendment to the Act Employment and amendment to the Act on International Cooperation in Tax Administration took effect. Anti-tax-evasion measures include the areas of preliminary tax decisions and transfer pricing and will be applicable to groups with consolidated revenues exceeding 750mil EUR per year (CZK 20.3bn, source: epravo.cz).

Extensive amendment to the Bankruptcy Act will take effect on 1 July 2017. More (in Czech).

Amendment to the Act on the support of R&D and Innovations (bill no. 960) is now heading to the end of the legislative process. The aim of the proposal is to better define “eligible costs and expenditures” in research, development and innovation to better meet the purpose of the act.

The Government proposed a bill summarizing changes to tax laws after 1 January 2017. The Chamber passed the bill, but the Senate returned it with change proposals. The Chamber outvoted the Senate and passed the bill in its original version on 4 April.

The Chamber of Deputies has been reviewing the Canada-EU Comprehensive Economic and Trade Agreement CETA. The Senate approved the ratification.

The Chamber of Deputies and the Senate have been debating the Paris Agreement. The Senate approved the ratification.



From the sessions of the Senate

The Senate returned draft amendment to the Act on Registry of Contracts (bill no. 699) to the Chamber of Deputies. Change proposals of the Senate rejected most of the Chamber changes made to the original version of the bill. The exemption for state-owned Budějovický Budvar n.p. from the obligation to disclose contracts as well as exemptions for some pharmaceuticals and medical devices remained in the bill. The Chamber of Deputies will take the final vote in May. Read more details in Czech.

The Senate approved draft amendment to the Act on Sickness Insurance (bill no. 821) introducing paid paternity leave, among others. 


From the sessions of the Chamber of Deputies

The Chamber of Deputies passed draft amendment to the Act on the Residence of Foreigners in the Czech Republic on 7 April. The bill no. 990 proposes, among others, the introduction of the so-called "foreign investor card", a special type of a long-term residence permit and improved rules for employees-foreigners posted within a corporation. Read more in an article by Radio Praha and in a summary (in English) by Petyovsky & Partners here. The bill aims at harnessing economic migration.

The Chamber passed draft amendment to the Construction Act (bill no. 927) on 5 April. One of major problems that is not being mentioned in discussions on issues hampering the development of municipalities is that there is no division line between the state administration, represented by the planning authorities, and municipal administration, represented by local politicians, mainly mayors...Setting the division line would also reduce the corruption potential, Head of the Association of Developers Tomáš Kadeřábek told the Czech News Agency, in reaction to the adoption of the draft amendment to the Construction Act. More.

The Chamber of Deputies passed amendment to the Act on Cybersecurity (bill no. 984).

The Chamber of Deputies passed draft amendment to the Act on Employment (bill no. 911) on 12 April. The purpose of the amendment is to introduce stricter rules for temporary employment and job agencies. Moire.

On April 26, the Chamber passed draft amendment to the Capital Markets Undertakings Act (bill no. 869) proposing, among others, regulation of high-frequency trading on stock exchange.

On April 28, draft amendment to the Act on Banks (bill no. 1061) had its first reading. The proposal sugests introducing exchange of information on cyber attacks among banks.

The draft amendment to the Act on Electronic Communications (bill no. 1096) had its second reading on 26 April. It aims, among others, at lowering the price of mobile data use. Operators argue that the effect of the legislation will be just the opposite. Change proposals were submitted.

The draft Act on compensation of damage incurred by breach of competition rules had its first reading on 14 March and is being reviewed by the Chamber committees (bill no. 991).

The Chamber Committees have been reviewing draft amendment to the Act on the Czech National Bank (bill no. 1009) proposing that the Czech National Bank’s recommendation on mortgage parameters to banks, currently non-binding, become binding.

The Chamber will debate State budget for 2017 (bill no. 1100).

The Chamber of Deputies passed draft Act on measures to reduce the cost of deploying high-speed electronic communications networks (bill no. 936). Construction works costs account for the highest (up to 80%) share of the total costs, the material says. The aim of the bill is to introduce rules, a minimum standard, from the very first phase of the process to minimize inefficiencies of electronic communications networks deployment. These rules could accelerate the process of e-government implementation. By 2020, operators could save up to 20-30% of the costs of deployment, the material suggests.

The Chamber of Deputies passed retirement age of 65. More.

The Chamber of Deputies received draft proposal of Act on eHealth and draft amendment to the Act on Health Services (bill 1043) that deal with issues related to technology use in health care. One of the goals is to establish the National eHealth Centre. The Government expressed disapproval with the draft proposal due to high costs.

The Chamber submitted to the Government draft amendment to the Labor Code (bill no. 1008) written by a group of MPs proposing the introduction of the institute of nursing leave. The material reacts to the ageing of the population and the need to adapt the current law to the challenges employers and employees are facing. The Government expressed disapproval. The Chamber Committee for Social Policy will debate a related draft amendment to the Sickness Insurance Act (bill no. 1029).  .

At its session on 24 August, the Government approved draft amendment to the Labor Code submitted by the Ministry of Labor and Social Affairs; proposing changes related to senior managerial employees (More details in a summary by Weinhold Legal here (in English),  regulation of homeworking, teleworking, contracts for work performed outside an employment relationship, or prevention from stress at workplace, among others. The bill no. 903 is being reviewed by the Chamber Committees, change proposals submitted..

The Senate’s draft amendment to the Labor Code suggests eliminating the institute of "karenční doba" related to coverage of the sickness insurance in the first three days of sickness of employees. (bill no. 744). There has been an ongoing debate within the tripartite (the government, employers and trade unions) on this issue.

The Chamber of Deputies has not started to debate the draft Act on State Prosecution yet (bill no.789790). 

On 18 December 2015, draft amendment to the Act on Elections to the Parliament of the Czech Republic was submitted to MPs and the Government. The bill no. 676 proposes rules for correspondence vote. The Government expressed neutral view.The Chamber has not started to debate the bill yet.

Representatives of the Liberecky region submitted draft amendment to the Act on Online Sales Registration (EET, bill no. 846) to the Chamber of Deputies and the Government. The bill suggests that EET could apply only to VAT payers. Another proposal bill no.792 by a group of MPs suggests excluding small entrepreneurs, non-VAT payers. Another proposal, bill no. 867, suggests exemptions for farmers selling their home-grown products at farmers markets. Another bill proposing EET act amendment  No debate of MPs over the bills have taken place so far.


From the sessions of the Government

According to the budget strategy and convergence program appoved by the Government on 19 April, Czech public finance should be in surplus until 2020 (Source: CTK/epravo.cz).

At the session on 10 April, the Government approved Strategic Framework Czech Republic 2030. The strategic framework outlined in the “Czech Republic 2030” is designed to serve as an umbrella mechanism for sectoral national strategies implementing sustainable development goals at the national level.

At its session on 5 April.the government passed draft amendment to the Act on Social Security Insurance the bill (no. 1096 under Chamber of Deputies records) suggests differentiation of social security insurance contributions based on the number of children the tax payer takes care of. The contributions by parents of two and more children could decrease from the current 6.5 to 0%.

At the same session, the Government appointed Ondřej Malý the new National Coordinator for digital agenda. He is a former member of the Board of the Czech Telecommunications Office.

Members of the American Chamber of Commerce in the Czech Republic