The Antivirus Programme – New Regime: C
we would like to inform you that, as an additional measure within the scope of targeted support for entrepreneurs aimed at compensating certain economic impacts related to the Covid-19 pandemic, the Czech president on 19 June 2020 signed an act that, among others, forfeits social security and unemployment insurance fees (hereinafter also “insurance fees”) paid by some employers as payers in relation to extraordinary measures introduced during the 2020 pandemic. The act will enter into effect on the day it is included in the Code of Law, which is expected to take place in the next days.
Forfeiture of social security and unemployment insurance fees (regime C of the Antivirus program)
The law adjusts the so-called new regime C of the Antivirus program, which is based on the temporary forfeiture of social security and unemployment insurance fees for companies with up to 50 employees.
The aim is to support employers to keep employees with an employment contract in such companies.
Principles and conditions for the application of claims
I) Time criterion
Social security fees can be forfeited for June, July and August 2020. Only fees paid by the employer as a payer in the amount of 24.8 % of the base is forfeited. The fees paid on behalf of employees remain unchanged.
II) Form and method of claims
One advantage of this compensation is the reduced administrative burden, whereas the employer – unlike when applying for benefits within regime A and regime B of the Antivirus programme – doesn’t need to submit any application for their claim. The employer simply files the claim within their monthly overview sent to the Social Security Administration (document titled “Overview of Insurance Fees”), wherein they notify of the reduced base and pay the reduced fee.
Employees must meet all the conditions of the claim for the forfeiture of the fees. Adherence to the conditions is assessed separately for each month. An employer is authorized to a forfeiture of their fees for a given calendar month if:
- They have at most 50 employees with an employment contract who pay medical insurance;
- The number of their employees with an employment contract who pay medical insurance is, as of the last day of the calendar month, at least 90% of the number of such employees as of the end of March 2020;
- The sum of tax bases for employees with an employment contract in the given calendar month is at least 90% of the sum of tax bases for employees with an employment contract in March 2020;
- They paid the insurance fees on behalf of their employees in the designated deadline and in the correct amount as per the overview stipulated under § 9 of the Insurance Act – i.e., duly and properly paid the insurance fees for their employees;
- They do not utilize, in the given calendar month, financial benefits provided to partially compensate for salary costs provided to employers within the Targeted Programme for Support of Employment as per § 120 of the Employment Act as approved by the Czech government. This means that the employer did not utilize funding from the Antivirus program (which was exteded to the end of August) to partially cover salary costs.
On the other hand and among others, employers who as of 1 June 2020 were not tax residents of (i) the Czech Republic or (ii) another member state of the European Union or the European Economic Area and did not achieve most of their earnings in the last completed tax period from sources in the Czech Republic, are not entitled to forfeiture of insurance fees.
Forfeiture of insurance fees here refers to a reduction of the base of the employer via the procedure (calculation) stipulated in this law.
The website of the Czech Ministry of Labor and Social Affairs provides detailed information about regime C of the Antivirus programme along with practical example.
In case of questions, feel free to contact the “Antivirus Team” of our office.
The WTS Alfery team, Alfery Hrdina Attorneys at Law