COVID Uncovered Costs (hereinafter the “Program”) is one of the compensation programs that help mitigate the effects of government restrictions associated with the covid-19 pandemic. As we have already informed you in our article, this Program was first launched in April 2021, now its second call follows (hereinafter the “Call 2”). In this article, we would like to introduce you to the innovations that the Call 2 brings and the conditions that need to be met to achieve this compensation.
Purpose of the Program
The aim of the Program is to compensate business entities for part of the loss (i.e. uncovered costs) and to help them cope with the decline in sales in connection with the government’s crisis measures in the form of financial compensation. The program is targeted at those entities whose turnover decreased by at least 50% during the relevant period compared to the given period last year, i.e. in 2019. The subsidy will be provided as area support regardless of the sector.
Decisive period
The period for which support can be drawn is following the end of the decisive period set by call 1. Support can therefore be drawn retroactively from 1 April 2021 to 31 May 2021. If the applicant meets the condition of declining turnover only for April 2021, as the decisive period for which the support will be paid to the applicant according to the Call 2, only the period from 1 April 2021 to 30 April 2021 can be chosen.
For the purposes of proving the loss, as in call 1, it will be necessary to prove the loss by comparing the profits with the same period for 2019, i.e. either with the month of April 2019 or with April and May 2019.
Submission of applications and Aid amount
Applications can be submitted from 28 June 2021 from 9:00 am, the last day for submission will be 13 September 2021. The submission of applications is ensured through the AIS MPO system.
The maximum amount of support is set at CZK 15 million per applicant for the relevant period only for the month of April 2021, or CZK 25 million per applicant for the relevant period for the months of April and May 2021.
The amount of support is 60% of uncovered costs for the relevant period, or 40% of uncovered costs for the relevant period for business entities with state participation of the state or a territorial self-governing unit of the Czech Republic.
Simultaneous drawing of other programs and EU subsidies
The applicant is obliged to submit an overview of all subsidies and funds which have been already received, for which he has received an unquestionable promise or for which he has applied, and which have not been decided on as of the date of submission. The applicant is obliged to acknowledge to the Program the provided and expected subsidies and grants notified in accordance with point 3.1. of the current Temporary Framework of the European Commission (hereinafter the “Temporary Framework”) for eligible expenditure. If the applicant has obtained any other support provided outside the scheme of point 3.1. Temporary framework, he is also obliged to admit it. The applicant is also required to include an appropriate part of the support provided under the Antivirus programs. If the applicant is the recipient of a compensation bonus, in case the application is approved under the COVID Uncovered Costs Program, it is the applicant´s obligation to return the corresponding part. Support under Call 2 for the COVID Program Uncovered costs can be combined with the COVID 2021 Program.
Application for support
The conditions of the application have remained unchanged since call 1, as well as the range of entities that are entitled to apply for the support. The application must also be accompanied by the following documents:
- affidavit of the beneficiary (this will be generated automatically by the AIS MPO system);
- a revised income statement (prepared in accordance with the requirements and criteria set out in Note 2);
- a report on the decrease in turnover and an overview of subsidies (compiled according to the requirements and criteria set out in Annex 2 to the Call 2); and
- in cases where required by Annex 2 to the Call 2, the Auditor’s Report containing the auditor’s conclusions on the Adjusted Profit and Loss Statement in accordance with the requirements set out in Annex 2 to the Call 2.
An eligible applicant is one who:
- is an entrepreneur, natural or legal person, and performs business activities based on Act No. 455/1991 Coll., On Trade Licensing (Trade Licensing Act), as amended, or in a similar manner;
- because of the COVID-19 pandemic, their turnover in the period of the applicant´s business decreased by at least 50% over the relevant period compared to the same period in 2019. Turnover for the purposes of this Call 2 will be reported in accordance with Annex 2 of the Call 2. An applicant who started an operation / activity (or became self-employed) only after 1 April 2019, or an applicant whose business activity was reduced during the Decisive Period due to the relevant fact, may choose any two as a comparison period consecutive months from 1 April 2019 to the end of 2020. In the event that the applicant chooses only April 2021 as the relevant period and has started an operation / activity (or became a self-employed person) only after 1 April 2019, whether the appliccant´s business activity in the Decisive Period was reduced due to the relevant fact, then he can choose as a comparative period any month from 1 April 2019 to the end of 2020;
- demonstrates uncovered costs for the relevant period according to point 3.3 of the Call 2;
- The applicant has not yet used up the support up to the maximum possible amount per applicant according to point 3.12. Temporary Framework of the European Commission; while
- meets the other sub-conditions set out in Call 2.
Conclusion
The Call 2 of the COVID Uncovered Costs Program follows the first call and thus represents another in a series of compensation programs. Compared to the first call, however, the Program brings some changes, such as the possibility of drawing support only for part of the decisive period, or stricter conditions of parties to support from other programs, including the need to grant all provided and expected subsidies and support notified under point 3.1. the current Temporary Framework of the European Commission for eligible expenditure.
- More information about the COVID Program – Uncovered Costs can be found on the MPO website: COVID Program – Uncovered Costs (mpo.cz).
In case of any questions or in case of support with the preparation of an application for support from the COVID Program – Uncovered costs, we are at your disposal – do not hesitate to contact us.
Jakub Málek, partner – malek@plegal.cz
Barbora Fuková, legal assistant – fukova@plegal.cz
29. 06. 2021