Czech Covid-19 response

Corporate and Personal Income Tax

The late filing of the corporate income tax return and personal income tax return and payment of the resulting income tax which was due on 1 April 2020 will not be subject of sanctions from the Czech Tax Authorities on condition that the late tax return would be filed and the tax would be paid until 1 July 2020.

The corporate tax advances and also the personal tax advances due on 15 July 2020 are cancelled for the tax payers with the calendar year taxation period. However, the tax payers with fiscal year taxation period have to ask to the potential remission of tax advances by filing an individual request to the Tax Authority.

For more detail or other support please contact:

Romana Vítová
T +420 602 121 831
E Romana.Vitova@vgd.eu

VAT

The late filing of the control statement due between 1 March 2020 and 31 July 2020 will not be subject of sanctions from the Tax Authorities. Proving the connection with the COVID-19 reasons is not required.

Also, the late filing of VAT return for the cases when the tax payer receives a decision about remission of the penalty for late filing of the control statement for the same tax period is not subject of sanctions from the Tax Authorities.

However, for late payment of VAT there are not any exemptions.

For more detail or other support please contact:

Zdeněk Lážek
T +420 603 445 918
E zdenek.lazek@vgd.eu

COVID LOANS

Amid coronavirus crisis in Czech Republic The Czech-Moravian Guarantee and Development (or CMZR) Bank’s, which is a state agency, offer to SME’s so called Covid Loans. These loans do represent interest-free loans to help SME’s with their cash-flow and all over to uphold Czech economy in times of crisis and during the follow up months.

The Czech-Moravian Guarantee and Development (or CMZR) Bank’s long-term goals and primary business are focused on providing assistance to small and medium-sized enterprises (SMEs) with the aim to enable them an easier access to financial capital, share their business risk and reduce their project costs through different types of support tools as bank guarantees, preferential loans and financial subsidies.

For more detail or other support please contact:

Jan Šuma
T +420 602 404 887‬
E jan.suma@vgd.eu

COVID-19 and its influence on financial statements approval and profit distribution

One of the areas that are seriously impacted by Coronavirus Lock-Down in Czech Republic is general meetings and their obligation to approve financial statements and approve distribution of profit. How to mitigate such state and how to handle profit distribution within Czech entities in time of Coronavirus Crisis?

Under Czech law managing director is obliged to call for general meeting to approval financial statement latest by the end of sixth month following accounting period at hand. Most of companies in Czech does have accounting period, which does follow calendar year and thus by the end of June, they are to call for general meetings. As for joint-stock company the period to call for a meeting is thirty days for limited liability company it is fifteen days. As you can see the time is nearing and options of gatherings or travelling are uncertain.

As there are serious travel restrictions in place and according to Czech government’s statement they shall be in place at least until end of June, we do anticipate that alternative ways of holding general meetings will be needed. In such case Czech law foresees way to hold general meeting remotely, if permitted in articles of association or to hold general meetings by proxy. In later case all the power could be vested to one person, which could by proxy approve both financial statements and profit distribution.

Second question at hand is how to handle the profit distribution with stress on cash handling and projection of future uncertain development on Czech and European market. There are several ways how to handle profit distribution throughout the course of this year. The rule to approved financial statement by the end of sixth month following the accounting period is still in place, but there is no restriction on using such approved financial statements during the course of the follow up accounting period. So the options are to distribute none of profit, to distribute profit partially, to distribute profit subsequentially in portions throughout the accounting period that follows or to approve an advance payment for the profit share.

VGD Czech Republic thru their corporate finance, legal and accounting function is prepared to help our fellow Nexians’ clients to handle their general meeting in by coronavirus lock-down Czech Republic and to project their cash and profit distribution throughout the following months.

Robert Musil
T +420 777 321 603‬
E robert.musil@vgdlegal.cz

OBSTACLES AT WORK – STATE CONTRIBUTIONS

Coronavirus pandemic and government restrictions that were adopted with respect to protect the citizens against this pandemic may cause obstacles at work on employer or employee site. Most frequent obstacle on employers’ part is impossibility to assign the employee work within the scope of standard weekly hours. In order to secure the working places and prevent mass employment termination, the government propose several types of contribution.

In case the employer is not able to assign the employee work because he must “close his establishment” pursuant to respective government regulation, he shall settle the wage compensation in the amount of 100 % of average wage. The state contribution is 80 % of paid wage compensation. In case the employer is not able to assign the employee work due to decrease in sale of products or demand for services (“partial unemployment”) he shall provide the employee wage compensation 60% – 100% (depend on the internal policy or agreement with trade union). The state contribution in this case is 50% of paid wage compensation. Other type of contribution is for obstacle caused by non-delivery of raw materials or quarantine of employees).

For more detail or other support please contact:

Veronika Nožičková
T +420 734 160 656
E veronika.nozickova@vgdlegal.cz

Štítky coronavirus, covid-19