2nd August 2018

Czech Legislation Update May-July 2018

After general election in October 2017, Czech minority government was formed but lost vote of confidence in the Chamber of Deputies, the Lower Chamber of the Parliament of the Czech Republic, and resigned on 17 January 2018. It has continued as a caretaker government. On 27 June, President Zeman appointed ministers of the second minority coalition government composed of ANO and Social Democratic Party, backed by the Communist Party on crucial issues. On 11 July 2018, the coalition government won vote of confidence in the Chamber of Deputies. 


Tax Code amendment proposal originally suggested that banks, legal advisers, notaries, auditors, financial advisers, insurers etc should disclose information on their clients if a tax administration office asks them to do so in suspicious cases. On 21 March, MPs passed the bill with rules applying only to banks. The Senate rejected the bill on 25 April and the Chamber of Deputies overrode the Senate veto on 23 May. The amendment was recently published in the Collection of Acts.  

The President also signed amendments to the Clean Air Act and Income Tax Act

Starting as of 1 June 2018, the Czech Social Security Administration disburses a new type of welfare benefit out of the sickness insurance scheme: a caregiver allowance which may be drawn for a period of up to 90 calendar days. The claim for the family caregiver allowance (and for caregiver leave) is conditional upon the following: the person in need of care must have been hospitalized for at least seven days, and is expected to require domestic care for at least another month. Also, the person in need of care must consent in writing to being assisted by the caregiver. Family caregiver allowance will be granted for no more 90 days, in the amount of 60% of the reduced daily assessment base per calendar day. Read more in an article by bnt attorneys-at-law.


From the session of the Senate

The Senate has returned a government proposed amendment to the pensions’ law to the lower house after proposing several changes. The proposed bill would increase old age pensions for all, with a special focus on people over the age of 85. Senators have proposed that instead of giving an extra 1,000 crowns a month to pensioners aged over 85, the state should provide the increase to all who have been in retirement for 25 years and more. The Speaker of the Senate, Milan Stěch, warned against making insignificant changes, saying that a delay in the bill’s approval might jeopardize the projected increase in all pensions as of next year, Radio Praha writes.

The Senate agreed to ratification of the protocol prolonging and modifying the Protocol on research and development cooperation between the Czech Republic and the USA.

On 14 February, the government approved the accession of the Czech Republic to the European fiscal pact. The Fiscal Pact is an international treaty that was signed on March 2, 2012 by twenty-five EU Member States, ie all but the UK, the Czech Republic and Croatia (which were not yet a member country). It is applicable from 1 January 2013 and is expected to be incorporated into the EU's contractual framework. EU Member States can access the pact at any time without restrictions. The content of the Pact is the framework for budgetary discipline and coordination of the economic policies of the EU Member States that the States Parties undertake to observe. The eurozone countries and non-euro area signatories who have voluntarily announced their intention to be bound by the provisions must implement the rule of balanced government budgets into national law. This means annual government-adjusted balance net of economic cycle and one-off and transitional measures (the so-called structural balance) not worse than minus 0.5 percent of GDP. Both Chambers of the Czech Parliament are reading the document.



From the sessions of the Chamber of Deputies

At the end of June, the Chamber of Deputies passed in the third reading MPs draft amendment to the Act on Infrastructure development that could shorten the construction of key highway, railway and water routes by 3-5 years, said Martin Kolovratnk, chair of the Chamber’s Economic Committee and one of the MPs who have proposed the bill. The bill introduces the institute of interim decision (mezitimní rozhodnutí).  (Source: epravo.cz) The Senate passed the bill on 18 July.and it could take effect in September. Senator Eliška Wagnerová (Green Party) claims that the law does not respect sufficiently the right of private property ownership (Source: epravo.cz). More by bnt attorneys-at-law.

Proposal of the Act on Personal Data Protection (bill no. 138 and related bill no. 131) in connection with the adopted EU regulation, had its 1st reading on 18 April and the second reading was postponed on 28 June. According to epravo.cz, if the bill, currently in the second reading, is passed, it would block access to information on certain cases, e.g. of a politician sent to custody or on criminal proceedings involving a politician being suspended.

The Chamber of Deputies is debating draft amendment to the Act on Free Access to Information (bill no. 50) suggesting that state-controlled institutions, including state-owned companies should dislose information (according to Act no. 106/1999) and contracts within the registry of contracts.The bill is being reviewed by the Chamber Committees.

The Government passed on 6 June draft amendment to the Act on Residence of Foreigners in the Territory of the Czech Republic, a transposition of EU legislation related to residence of third countries nationals for the purpose of research and development, studying, internships, volunteering, exchange and au-pair programs. The bill (no. 203)‚ deals with the issues of, among others, quotas for economic migration, employee cards, and employee visas for specific situations in the Czech labour market. Besides EU measures, the bill includes measures proposed by the Ministry of the Interior.


From the sessions of the Government

On 18 July, the Geovernment passed draft amendment to the Act on Collection of Acts, including measures to complete the projects of e-Collection of Acts and International Treaties and e-Legislation.

On 13 June, the Government passed 2017 annual report on the state of public contracts.

The newly-appointed justice minister Jan Kněžínek has been appointed the Head of the government’s Legislative Council, after serving as is its Deputy Head so far. 

The Ministry of Finance submitted to commenting round draft amendment to the Act on the Czech National Bank, that among others, would give the bank the power to determine mortgage parameters. The government passed the bill earlier in 2017, but the Chamber did not manage to pass the bill before general election in October 2017.

On June 25, 2018 amendments to the EU Directive on Administrative Cooperation in the field of Taxation that require the mandatory reporting of information related to cross-border arrangements took effect. The Directive is intended to curb aggressive international tax planning and imposes reporting obligations on intermediaries and taxpayers. It also mandates the automatic exchange of information between EU member states from mid-2020 onwards. Czech Ministry of Finance should have the draft amendment to respective tax laws ready by the end of 2018. It is yet to be determined who will be in charge of reporting and tax advisers' confidentiality status may be challenged. (Source: epravo.cz)



>> Read also Co-author of Czech insolvency act warns debt-relief amendments could trigger judicial system collapse.  

Members of the American Chamber of Commerce in the Czech Republic