At the end of last year, the Government of the Czech Republic approved the renewal of the COVID – Uncovered Costs and COVID – 2021 programs. In addition to the Antivirus program and the compensation bonus, entrepreneurs will thus be able to draw one of these two compensations if their conditions are met. The programs are intended to mitigate the negative impact on business in the last quarter of 2021, when trade and services were curtailed due to the COVID-19 disease pandemic.
COVID – 2021
The COVID – 2021 program aims to assist businesses whose turnover has fallen by at least 30% (i.e., a decrease in revenue from own output and goods) as a result of the COVID-19 disease pandemic or the fight against it during the decisive period from 1 November 2021 to 31 December 2021, compared to the same period in 2019 (the comparison period). An applicant that was established or commenced operations/activities after 1 November 2019 may choose any two consecutive months between November 2019 and October 2021 as the comparison period.
The financial support is primarily intended for applicants who meet the following conditions:
- is a natural person or legal entity carrying out business activities on the basis of the Trade Licensing Act, or in a similar way;
- as a result of the COVID-19 pandemic, his/her business activity has seen a decrease in sales of at least 30 % in the decisive period compared to the comparison period;
- had at least one employee as of 1 November 2021, where for the purposes of this program, employees are also defined as ‘cooperating persons’ under the Income Tax Act (in the case of applicants – natural persons) and managing directors with a contract for the performance of this function;
- has not yet used up the maximum amount of aid (according to point 3.1 of the Temporary Framework of the European Commission per one beneficiary);
- has not repeatedly violated the emergency or crisis measures taken in connection with the spread of COVID-19;
- meets other sub-conditions that will be specified in the call.
The aid is granted at a rate of CZK 300 per day per employee in the case of a decrease in turnover by at least 30 % but less than 50 %. In the event of a decrease in turnover of more than 50 %, the entrepreneur will be able to apply for a subsidy of CZK 500 per day per employee. Only employees who were registered with the Czech Social Security Administration on 1 November 2021 to pay insurance premiums are included in the calculation.
Eligible costs are costs and expenses for the operation and maintenance of business activities or establishments, such as personnel costs, material costs, services (including leasing), depreciation, taxes and fees, loan repayments, overheads, etc., created from 1 February 2020 to 31 December 2021.
COVID – Uncovered Costs
The purpose of the second program is to compensate businesses for the part of their costs that are not covered by income. Eligibility for support under the COVID – Uncovered Costs program will arise in the event of a decrease in sales in the relevant period from 1 November 2021 to 31 December 2021 of at least 30 % compared to the comparison period (2019 or 2018). The decrease in sales will be demonstrated by the business through an adjusted profit and loss account based on the interim financial statements for the relevant period.
An eligible applicant is an applicant that:
- is a natural person or legal entity carrying out business activities on the basis of the Trade Licensing Act, or in a similar way;
- as a result of the COVID-19 disease pandemic, his/her business activity has seen a decrease in revenue of at least 30 % in the relevant period compared to the comparison period;
- is in a loss-making position for the relevant period;
- meets other sub-conditions that will be specified in the call.
The State will provide across-the-board support, regardless of sector, of 40 % of the uncovered costs, with a limit of CZK 30 million per applicant. In the event of a decrease in turnover of at least 50 % over the relevant period, the amount of support will be 70 % of the uncovered costs. Micro-enterprises (i.e. enterprises with up to 10 employees and a turnover of up to EUR 2 million) whose sales have fallen by at least 80 % as a result of the pandemic and the measures may receive the support of 90 % of the uncovered costs.
The uncovered costs are the losses net of subsidies granted to the aid applicant and notified under point 3.1 of the Temporary Framework of the European Commission, Antivirus A, B and other subsidies for eligible expenses.
Submission of the application
Applications for aid will be submitted via the AIS MPO (https://aisportal.mpo.cz/AISPortal/default). In order to register as an applicant, it is necessary to establish an active identity of a natural person (account) on the portal https://www.identitaobcana.cz/. If the applicant is already registered in the system, no new registration is necessary. However, the date for the start of the reception of applications has not yet been published.
Conclusion
The grant programs will not be able to be combined with each other, even with a potential compensation bonus, but will be allowed to coincide with the Antivirus program.
If you have any questions or need support in preparing an application for support from the COVID – 2021 or COVID – Uncovered Costs programs, we are at your disposal – so please do not hesitate to contact us.
Mgr. Jakub Málek, managing partner – malek@plegal.cz
Kristýna Nguyenová, legal assistant – nguyenova@plegal.cz
10. 01. 2022