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Czech Republic

Paul Hastings in collaboration withKinstellar
Liquidity Measures
Relief
Other

Liquidity Measures

COVID II Programme

Government Measure

Eligible companies may apply for operating loans from commercial banks with a value from CZK 10k (approx. €366) up to CZK 15m (approx. €548.948k) and for financial aid to cover interest payments.

The Czech government guarantees 80% of the loan.

Financial aid will be provided in respect of interest payments for up to CZK 1m (approx. €36.597k).

The guarantee period is up to 3 years.

The guaranteed commercial loan must be used solely to make operating cost payments, e.g. salaries, rent, utilities, supplier/customer invoices, material and supplies, etc.

Financing may be made available through commercial banks (no specific list available).

Financing to be agreed with the respective commercial bank and the application for a guarantee to be submitted to the Czech-Moravian Guarantee and Development Bank.

 
Eligibility

Czech Republic based SMEs1 that:

  • are operating in any sector;
  • had to limit/close operations due to the measures implemented in the fight against the coronavirus pandemic;
  • will use the guaranteed commercial loan solely to make operating cost payments, e.g. salaries, rent, utilities, supplier/customer invoices, material, supplies, etc; and
  • have operating costs relating only to activities outside Prague which requires funding to be allocated to such costs.

For more information on eligibility please here (available in Czech).

1In order to qualify as a SME, a company must jointly fulfil the following two criteria: 1) have a yearly employee average number below 250 and 2) have a yearly net turnover below €50m or an annual balance sheet total (total assets) below €43m, as per the last approved financial statements. Total assets include fixed assets, current assets and prepaid expenses. An enterprise acquires / loses the status of a SME if the number of employees and the financial limits are met / not met in two consecutive accounting periods.

 
Supervising Authority

The Ministry of Industry and Trade

The Czech-Moravian Guarantee and Development Bank.

 
Availability

The first round of applications closed on 3 April 2020.

Next round may be announced pursuant to a decision by the Ministry of Industry and Trade.

COVID III Programme

Government Measure

Eligible businesses may apply for support in the form of state guarantees for operating loans provided by commercial banks.

The programme is currently in development – details will be announced shortly.

 
Eligibility

The programme is currently in development – details will be announced shortly.

 
Supervising Authority

The Ministry of Industry and Trade

TheCzech-Moravian Guarantee and Development Bank.

 
Availability

The programme is expected to be launched in the second half of May.

COVID Prague Programme

Government Measure

Eligible companies and self-employed persons may apply for operating loans from commercial banks with a value up to CZK 15m (approx. €548.948k) and for financial aid to cover interest payments.

The Czech government guarantees 80% of the loan.

Financial aid will be provided in respect of interest payments for up to CZK 1m (approx. €36.597k).

The guarantee period is up to 3 years.

The guaranteed commercial loan must be used solely to make operating cost payments, e.g. salaries, rent, utilities, supplier/customer invoices, material and supplies, etc.

Financing may be made available through commercial banks (no specific list available).

Financing to be agreed with the respective commercial bank and the application for a guarantee to be submitted to the Czech-Moravian Guarantee and Development Bank.

 
Eligibility

Czech Republic based SMEs that:

  • are operating in any sector;
  • had to limit/close operations due to the measures implemented in the fight against the coronavirus pandemic;
  • will use the guaranteed commercial loan solely to make operating cost payments, e.g. salaries, rent, utilities, supplier/customer invoices, material, supplies, etc; and
  • have operating costs relating to activities in Prague which requires funding to be allocated to such costs.

For more information on eligibility please see here (available in Czech).

 
Supervising Authority

The Ministry of Industry and Trade

The Czech-Moravian Guarantee and Development Bank.

 
Availability

The first round of applications closed on 21 April 2020.

[Note: it is not sure whether there will be a second round of applications. At this moment, it is not presumed.]

COVID Plus Guarantees

Government Measure

Exportní garanční a pojišťovací společnost, a.s.

("EGAP”) may provide guarantees for the repayment of loans (for operating expenses, working capital or innovation initiatives) to exporters, manufacturing and commercial enterprises.

EGAP may insure direct and indirect guarantees.

 
Eligibility

Applies to companies that have more than 250 employees and whose exports represent at least 1/5 of their total sales.

 
Supervising Authority

Ministry of Finance, Ministry of Industry and Trade, and EGAP.

 
Availability

As of 29 April 2020..

Relief

Tax Relief Packages

Government Measure

Tax relief package no. I:

  • Mass exemption from penalty fees for the late filing of income tax returns by natural persons and legal entities (including default interest) through to 1 July 2020.
  • Exemption from penalty fees for the late filing of tax returns in all instances where the tax entity is individually exempt from default interest or is exempt from penalty fees for deferral and/or tax payment instalments, or is exempt from the penalty for failure to file a control report in relation to the coronavirus pandemic.
  • Mass exemption from penalty fees for the late filing of a control report in the amount of CZK 1k, incurred between 1 March 2020 and 31 July 2020.

Tax relief package no. II:

  • Remission of the June advance payment for the income tax of natural persons and legal entities.
  • Flat waiver of late submission of real estate
  • property tax, return tax, or late tax / advance payments until 31 August 2020 at the latest.
  • Introduction of the principle of the retroactive effect of tax losses on the income tax of both natural persons and legal entities in 2020 for the 2018 and 2019 taxation periods.
  • Suspending the obligation to electronically record sales for entities falling into all phases of EET for the duration of the state of emergency and for 3 months thereafter.
 
Eligibility

Applies to all Czech taxpayers (natural persons and legal entities) with the exception of Tax relief package no. 1(ii). The exemption from penalty fees for late filing of tax returns will occur automatically only if the tax entity is individually exempt from default interest or is exempt from penalty fees for deferral and/or tax payment instalments, or is exempt from the penalty for failure to file a control report in relation to the COVID-19.

 
Supervising Authority

Ministry of Finance

 
Availability

Both Tax relief packages are already available and currently in force.

Other

Protection from eviction for non-payment of rent

Government Measure

Until 31 December 2020, landlords are prohibited from terminating lease agreements due to tenant delays with rent payments, provided that the delay occurred between 12 March 2020 and 30 June 2020 and resulted from the extraordinary measures imposed due to the COVID-19 pandemic, which substantially limited tenant business operations.

 
Eligibility

All business tenants in the Czech Republic submitting documentary evidence to landlords of the impact of the COVID-19 pandemic measures within 15 calendar days of the first delay in rent payments.

 
Supervising Authority

Enacted as statute under emergency coronavirus legislation

 
Availability

As of 27 April 2020

Loan Moratoria

Government Measure

Debtors can defer all debt payments (instalments) to creditors by up to 6 months.

 
Eligibility

All persons that are debtors under a loan or similar agreement if the creditor is a business/business entity.

 
Supervising Authority

Enacted as statute under emergency coronavirus legislation.

 
Availability

Between 1 May 2020 and 31 October 2020 (the length of the Deferral period depends on the date of the application).

Changes to Insolvency Law

Government Measure

Abolition of the obligation to file a debtor’s insolvency petition if the insolvency results from the COVID-19 pandemic situation.

Ineffectiveness of a creditor’s insolvency petition (i.e. the law will make creditor’s insolvency petition ineffective).

Possibility to apply for an extraordinary moratorium of up to 6 months (i.e. insolvency cannot be declared during this period).

 
Eligibility

Applies to all potential debtors that are businesses/business entities (save for the ineffectiveness of a creditor’s insolvency petition that applies to all debtors).

 
Supervising Authority

Enacted as statute under emergency coronavirus legislation.

 
Availability

Until 31 August 2020 (save for the abolition of filing a debtor’s insolvency petition, which applies until 31 December 2020).