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The deadlines for reporting obligations and related annual tax returns has been extended to 30 September. The deadline for the innovation contribution is changed to 30 September, 2020. Defaults during the emergency will not affect taxpayer ratings, they will not change to the detriment of the taxpayer. The tourist tax will be suspended until 31 December, 2020.
Subsidy for employers and employees
To the employees who are working in reduced working hours because of COVID-19 can receive a subsidy after their lost wage with the following conditions:
- the amount of the subsidy is related to the net wage of the employee of the day when the emergency phase has been declared.
- the amount of the subsidy is 70% of the proportionate wage for lost working hours
- the subsidy is available if the reduction of the working hours is between 15-75%.
The reduced working hours can be 2 hours per day.
Both employer and employee have to undertake that the employer participates in education under the name of personal development time if the reduced working hours is at least half of the normal working hours. If the reduced working hours are less than the half of the prior working hours, the participation in education is optional. If an employee would like to participate in that case, the education has to take time in 2 years after gaining the subsidy. The related wage cost is paid by the employer.
The maximum monthly net amount of the wage subsidy may not exceed the proportional part of twice the net minimum wage (HUF 214,130),ie HUF 75,000.
The temporary employment agencies can also apply for the wage subsidy, but it is still not possible to employ the employment at a different workplace or job other than defined in the employment contract.
To apply for the subsidy, the employment has to be employed at least from the day of the declaration and cannot be in his notice period. The subsidy is tax-free, and valid for home office also. The subsidy is valid for 3 months. but cannot be paid for unpaid leave.
The rate of the social contribution tax, effective as of 1 July, 2020 will be reduced to 15,5% from the H2 2020. The contribution burden of SZÉP card, is temporarily changing, between 22 April to 30 June, so only 15 percent of personal income tax rate to be paid for the time being.The total annual frame amount will change to HUF 800,000 for companies in private sectors while in public sector it will rise to HUF 400,000.
Workers sent on unpaid leave are also entitled to social security benefits.
Parents raising a chronically ill or disabled child will not be entitled to leave until the last day of the 2nd month after the end of the emergency. If, in the meantime, entitlement to the family allowance ceases, it will also expire at the end of the month in which the emergency ceases, and not until the end of the school year.
The deadline for allocating the VAT refund will be shortened. Reliable taxpayers change payment deadlines to 20 days instead of 30 days, and 30 days instead of 75 days for a normal taxpayers.
Municipal councils have been granted authority to exempt for part of 2020 certain groups of business entities whose financial liquidity has deteriorated due to adverse effects of COVID-19 from property tax: on land, buildings and structures related to conducting business activity;
Municipal councils may also extend, in case of certain business entities, time limits for property tax instalments payable in April, May and June 2020 until 30 September 2020 at the latest.
In case of decisions to postpone or break down tax (tax arrears) into instalments, no extension fee is charged. Additionally, the Minister of Finance has been authorised to refrain – by regulation – from charging interest on tax arrears.
The timetable for proceedings and audits governed by the Tax Ordinance has been suspended.
The time limit for issuing a ruling in case of applications submitted but not examined before 1 April 2020 has been extended by 3 moths.
Deadlines for MDR reporting obligations have been suspended until 30 June 2020.
The deadline for submitting tax information has been postponed until 30 September 2020 for taxpayers whose fiscal year began after 31 December 2018 and ended before 31 December 2019.
Subsidy for employers and employees
Downtime pay for employees who cannot work due to COVID-19 and the closure of the workplace or its part. The employer pays to an employee covered by economic downtime the remuneration reduced by no more than 50%, but not lower than the minimum remuneration for work, taking into consideration their working time. The employer will receive co-financing for remuneration in the period of downtime in the amount of 50% of the minimum remuneration plus social security contributions deducted by the employer from the amount of the co-financed remuneration.
Reduction of working time
The employer may reduce the working time by 20%, not more than 0.5 full-time employment, provided that the remuneration may not be lower than the minimum remuneration for work, taking into consideration the working time. In such case, the employer may apply for co-financing up to half of the remuneration, but no more than 40% of the average monthly remuneration from the previous quarter plus insurance contributions deducted by the employer from the co-financed remunerations.
The co-financing will be valid for 3 months from the submission of the application.
Exemption from social contributions
In case of micro-enterprises: (with less than 10 employees registered for social insurance) The Act exempts them from paying contributions for a period of 3 months (March, April, May). This means contributions will not be paid from April to June 2020.
The conditions for the exemptions:
- conducting business before February 1, 2020
- not being in arrears with contribution payments as at the end of 3rd quarter
- revenue not exceeding EUR 2m over the last 2 fiscal years.
In case of self-employment: conducting non-agricultural activity before 1 February 2020 and remitting own social security contributions, who meet the revenue criterion, i.e. in the month preceding the submission of the application they generated revenue not exceeding PLN 15 681
Postponement of payment:
At the request of the withholding agent who has difficulty with remitting current contributions due to the COVID-19 epidemic, there is a possibility to postpone the payment deadline for the period from January 2020.
The postponement concerns all business entities, regardless of the size of the business or the duration of their business activity.
The Social Insurance Institution will not charge the extension fee for the postponement of contribution payments.
Regulations on Binding Rate Information and new tax rate matrix have been postponed until 1 July 2020. The obligation for large enterprises to submit new JPK_VAT files has been postponed until 1 July 2020.
Corporate income tax
Pre-payments due on 15 June 2020 are automatically waived for all taxpayers whose fiscal year corresponds to the calendar year. The remission of advance payments does not mean the remission of the tax itself.
Those whose fiscal year is different or who wish to apply for a reduction of other income tax pre-payments need to use other instruments available according to the tax code, i.e. request changes to their pre-payment assessment or apply for an exception from the duty to prepay taxes (request for the waiver of pre-payments).
The amendment is in process. In principle, it will be possible to apply the tax loss retrospectively by filing supplemental tax returns. The payer will thus be able to claim an income tax overpayment and request a refund. In this case, therefore, it will be possible to deduct the tax loss assessed in 2020 from the tax assessment base reported in 2019 and 2018.
Real Estate Tax
The property tax or prepayments that do not exceed the amount of CZK 5,000, it is possible to pay without a penalty until 31 July 2020. For the property tax or tax payment higher than CZK 5,000, it is possible to request a payment deferment. An application fee is waived for applications submitted by 31 July 2020.
Interest on late property tax payment will not be automatically waived. Taxpayers must request relief of the latest interest on late property tax payment. An application fee is waived for applications submitted by 31 July 2020.
Real Estate Transfer Tax
For real estate transfer tax return with the time period for submission of tax return expiring in the period from 31 March 2020 to 31 July 2020, it is not necessary to request an individual extension of the deadline by 31 August 2020. If the real estate transfer tax return is submitted and the tax or advance payment for this tax paid by 31 August 2020, all sanctions, related to this late payment, will be remitted.
The ministry is also currently considering the option of completely canceling the real estate acquisition tax.
Subsidy for employers and employees
Employers whose economic activity is at risk due to the spread of the infection will receive a contribution to the full or partial reimbursement of wages that employees are entitled to due to an obstacle on the part of the employee (ordered quarantine) or the employer (business closed due to government regulation) if it is proven that the obstacle was caused by COVID-19.
- The employer complies with the provisions of the Labour Code.
- The employee for whom compensation is claimed must not be in their termination notice period and must not be given a termination notice.
- The employer is active in the business sphere.
- Employees must be employed and participate in the sickness and pension insurance system, meaning that the provision does not apply to agreements on work amounting to less than CZK 10,000.
- The employer must prove that they have paid the wages, including all deductions and income tax.
The contribution will be paid by the Labour Office of the Czech Republic. Applications can be submitted beginning April 6, 2020. The period for which the subsidies will be paid out is from March 12 to April 30, 2020.
The deadlines for submitting returns and the payment of VAT have not changed and the government has not adopted any measures to relieve VAT payments. However, the following options are available.
It is possible to request a payment deferment or payment in installments. The taxpayer must prove in the request that the delay in the payment is caused by the extraordinary situation. If the application is submitted by 31 July 2020, the administrative fee for the tax deferment application will be waived.
It is possible to request the waiver of interest on late VAT payment. Reasons that are fully accepted include the demonstration of the effects of the extraordinary situation.
Corporate income tax
The deadline for filing the tax return is the end of the month following the month in which the government will officially end the pandemic period.
Until the end of the deadline for filing CITR 2019, the payment of advances on income tax during 2020 is paid on the basis of the tax liability for 2018.
The deadline for refunding income tax overpayments for 2019 has also changed.
As for the amortization of losses, unpaid losses of the years 2015-2018 can be deducted in the tax return for 2019 from the income tax base once up to the amount of 1 mil. EUR.
Tax audits might be suspended, tax proceedings have already been suspended. Some deadlines are forgiven to miss.
Subsidy for employers and employees
Conditions for entitlement to the subsidy
- Employer has fulfilled its tax obligations according to a special regulation (income tax is stated in the applications)
- Employer has fulfilled the obligations to pay an advance on public health insurance premiums, social insurance premiums and compulsory contributions to old-age pension savings,
- Employer has not infringed the prohibition of illegal employment during the two years prior to the application for the allowance,
- Employer has no financial obligations due to the Office,
- Employer is not in bankruptcy, liquidation, compulsory administration or does not have a specified repayment schedule according to a special regulation
- Employer does not have registered unsatisfied claims of its employees arising from the employment relationship,
- Employer does not have a legal penalty prohibiting the receipt of subsidies or subsidies or a penalty prohibiting the receipt of assistance and support from European Union funds in the case of a legal person.
For employers who, at the time of declaring an emergency, emergency or state of emergency on the basis of the Measure of the Public Health Office of the Slovak Republic, have closed or prohibited operations, the compensation of wages is 80% of an average salary (EUR 1,100) it means EUR 880.
For self-employed persons who, at the time of the declaration an emergency, emergency or state of emergency on the basis of the Measure of the Public Health Office of the Slovak Republic, closed or prohibited operations or whose sales decreased, the compensation for loss income is the most flat-rate contribution according to the % decrease in sales.
For affected employers, the subsidy is either in a form of A) compensation of wages - 80% of an average salary (EUR 1,100) it means EUR 880, or B) reimbursement of part of the wage costs if they worked more than 50% of the time - the most flat-rate contribution according to the % decrease in sales.
Support for selected groups of natural persons who have no other income at the time, the compensation for loss of income in the form of payment of a lump sum allowance.
Deferment of payment of contributions - social and health insurance
It is relevant only for the self-employed persons and employers, not for employees. Employee benefits cannot be deferred.
The deferral applies to both social and health insurance.
However, so far only levies for March 2020 can be postponed. The new due date is 31.7.2020.
Deferral is allowed for entrepreneurs with a decrease in sales of 40% and more.
Deferment of levies for the period 04/2020 et seq. must be authorized by the Government of the Slovak Republic by issuing a regulation.
Complete forgiveness of contributions - social levies / closed establishments
It is relevant only for the self-employed persons (with operations closed by the Public Health Authority of the Slovak Republic, but it was also closed for at least 15 days) and employers, not for employees. Employee benefits must be paid as standard.
It applies only to social insurance. However, it will tentatively cover levies for April 2020.
The employer must submit a solemn declaration to the Social Insurance Agency no later than the eight day of the calendar month following the calendar month for which it is not obliged to pay premiums.
Remission of levies for the period 05/2020 et seq. must be authorized by the Government of the Slovak Republic by issuing a regulation.