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Current Measures in Connection with the COVID-19 Pandemic

Following the previous tax alerts, we would like to inform you about the latest developments concerning emergency measures adopted in connection with the COVID-19 pandemic.

Anti-crisis tax package
The Government of the Czech Republic approved a bill that was drafted by the Ministry of Finance and that amends certain tax laws in connection with the COVID-19 pandemic (the so-called anti-crisis tax package). The most important changes include the following proposed measures:

⦿ The so-called loss carryback implemented for personal and corporate income taxes, based on which taxpayers will be able to claim their tax loss for two tax periods preceding the tax period in which their loss occurred. Taxpayers will be able to retroactively reduce their tax base for the tax loss from 2020 in their 2019 and 2020 tax returns in the form of refundable overpayment.

⦿ A reduction of value-added tax on accommodation services, admissions to cultural and sports events and admissions to theaters, cinemas, museums and other cultural and sports facilities from the current 15% to 10%.

⦿ An expanded option of municipalities to fully or partially exempt real estate, which was affected by the crisis caused by the COVID-19 pandemic, from real estate tax, based on a generally binding decree.

⦿ A reduction of the annual road tax rate by 25% for trucks with a maximum permissible weight exceeding 3.5 tons applicable retroactively from the beginning of 2020.

The anti-crisis package will be now discussed by the Parliament in an accelerated manner as part of the state of legislative emergency. The final version of the adopted law may therefore differ from the current bill.

Expansion and extension of the Antivirus programme

The Government of the Czech Republic has agreed to extend the B scheme of the Antivirus programme until 31 August 2020, which includes obstacles to work on the part of the employer due to related economic difficulties caused by the spread of COVID-19 by reason of an ordered quarantine or childcare concerning a major percentage of employees,
a limited availability of inputs necessary to perform activities or a limited demand for services and products of the employer. The support provided based on the A scheme ended on 31 May 2020.

The Government of the Czech Republic also approved a new C scheme of the Antivirus programme, which will allow employers with up to 50 employees to waive social security and state employment policy payments for June, July and August 2020. Employers, who continued to employ at least 90% of their employees in the given calendar month as compared to 31 March 2020 (in terms of the number of employees and the sum of their assessment bases), will be entitled to waive these pay ments. In addition, these employers must duly make social security and health insurance payments that their employees are required to make and must not receive any wage compensation contribution from other schemes of the Antivirus programme.

We will continue to regularly inform you about any other measures adopted in connection with the current crisis.

Jiří Zoubek
Tax Partner
+ 420 296 152 111
jiri.zoubek@cz.gt.com

Pavel Humplík
Tax Partner
+420 296 152 111
pavel.humplik@cz.gt.com