Coronavirus-related Tax Relief
We hereby wish to inform you about the latest tax measures to mitigate the negative effect of the coronavirus pandemic.
Please note that the previous measures are addressed in our News 2/2020 and News 5/2020.
Compensatory bonus for the self-employed
People who carry out self-employment activity in their own name or are “collaborating persons” are entitled to compensatory bonus.
The following main conditions for obtaining compensatory bonus must be met:
- The self-employed person has not been able to carry out the activities in whole or in part beyond customary limits due to health risks or crisis measures adopted by the Government.
- The activity or cooperation carried out by the self-employed people must be their principal activity. In the case of secondary activity, the self-employed person may not be an employee at the same time.
- The self-employed person was active on or before 12 March 2020.
The maximum amount of bonus is CZK 25 000 for the period from 12 March to 30 April 2020, i.e. CZK 500 for each day. The self-employed person shall make a statutory declaration proving that the above conditions have been met. The limitation period for filing the application shall expire on 29 June 2020.
Exemption from VAT on gratuitous supplies of selected goods
The Ministry of Finance decided to exempt from VAT gratuitous supplies of goods to be used to prevent the spread of the coronavirus disease. These goods include in particular, but not limited to, coronavirus test kits, personal protective equipment (face masks, protective glasses, medical face shields, gloves), ventilators, disinfectants etc. The full list is contained in the Ministry’s decision published in Financial Bulletin No. 6/2020.
At the same time, the suppliers shall remain entitled to deduct VAT on the relevant taxable supplies.
The exemption shall apply retrospectively from 12 March 2020 to the date of termination of the state of emergency.
Exemption from VAT on gratuitous supplies to selected entities
Furthermore, the Ministry of Finance decided to waive VAT on gratuitous supplies to selected entities. This exemption is not bound to the object but to the recipient of the donation (gratuitous supply).
Thus, the exemption applies to gratuitous supplies of any goods or provision of any services for the purposes of medical service providers, the key elements of the integrated emergency management system, the Armed Forces of the Czech Republic and social services establishments.
Also, this exemption applies retrospectively from 12 March 2020 to the date of termination of the state of emergency.
According to the Financial Directorate’s Guidance, VAT payers who claim VAT exemption are not required to prove towards the Tax Administration that the gratuitous supply of goods or provision of service are linked to measures to prevent the spread of the coronavirus disease. At the same time, they are entitled to claim VAT deduction on the relevant taxable supplies.
Real estate acquisition tax
There is a general remission of penalties for late submission of real estate acquisition tax returns to be filed in the period from 31 March to 31 July 2020 provided that the tax return is filed by 31 August 2020. A general remission also applies to late payment interest if the tax is paid by 31 August 2020. The Ministry of Finance even considers entire abolition of the real estate acquisition tax.
Road tax
Similarly, there is a general remission of late payment interest on road tax advance payments due by 15 April 2020 and 15 July 2020 provided that these advances are paid by 15 October 2020.
If you have any further questions or require further clarification, please feel free to contact us anytime.
Your WTS Alfery Team