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Factsheet for measure CZ-2020-12/286 – Updated – measures in Czechia

Tax liberation and stabilisation packages

Stabilizační a liberalizační balíčky

Country Czechia , applies nationwide
Time period Open ended, started on 16 March 2020
Context COVID-19
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Deferral of payments or liabilities
Author Soňa Veverková (Research Institute for Labour and Social Affairs) and Eurofound
Measure added 05 April 2020 (updated 06 May 2021)

Background information

During the first wave of COVID-19 pandemic in spring 2020, three Tax Liberation and Stabilisation packages were presented by the Ministry of Finance of the Czech Republic (Ministerstvo financí České republiky, MF ČR .

With the start of second wave of COVID-19 pandemic, MF ČR has introduced other postponing of selected taxes for businesses most affected by the new government’s anti-COVID-19 measures.

In general, all Tax Liberation and Stabilisation packages enable tax payers to postpone some of their tax payments without any fees, interests or fines. According to Ministry of Finance of the Czech Republic (Ministerstvo financí České republiky, MF ČR , Tax Offices also should be tolerant to the tax payers to whom the anti COVID-19 measures reduce their ability to perform their tax duties.

Content of measure

The main measures of Tax Liberation and Stabilisation package I, published in Financial Bulletin of Ministry of Finance 4/2020 from 16 March 2020, are the following:

  • flat waiver of the fine for late submission of personal and corporate income tax return and default interest until 1 July 2020 at the latest, without having to prove the reasons;
  • flat waiver of the CZK 1,000 (€37 approx.) fine for late submission of a VAT control statement arising between 1 January and 31 July 2020 etc.

The main measures of Tax Liberation and Stabilisation package II, published in Financial Bulletin of Ministry of Finance 5/2020 from 24 March 2020, are the following:

  • waiver of the advance payments of the personal income tax and the corporate income tax due in June 2020,
  • introduction of loss carry-back, which means that payers of personal income tax and corporate income tax will be able to carry back their tax loss for 2020 in additional tax returns for the years 2019 and 2018.

The main measures of Tax Liberation and Stabilisation package III, published in Financial Bulletin of Ministry of Finance 9/2020 from 10 June 2020 are the following:

  • waiver of sanctions for late filing of personal income tax and corporate income tax return and tax payment,
  • waiver of sanctions for late filing of immovable property acquisition tax return and tax payment etc.

The Tax package, published in Financial Bulletin of Ministry of Finance 22/2020 from 14 October 2020 covers only businesses, whose major part of income generated in the period from 1 June 2020 to 30 September 2020 derives from one or more activities that are banned or restricted effective from 14 October 2020 (mostly in HORECA and Live performance sectors). These measures includes waiving of road tax and income tax prepayments for these businesses. Except of that, this Tax package includes also waiving VAT on the gratuitous delivery of selected medical goods and services for all taxpayers.

Updates

The following updates to this measure have been made after it came into effect.

09 March 2021

In Financial Bulletin 16/2021 the Ministry of Finance of the Czech Republic has extended the deadline for submitting taxes from 31 March 2021 to 3 May 2021 for paper forms and 1 June 2021 for electronic submissions.

To increase affordability of breathing protection devices and reduce heir prices, the government also waives VAT in the period from 4 April 2021 till 3 June 2021 for the delivery of filtering half masks and respirators that meet the parameters of protection class at least FFP2, KN95 or N95 or have the same or higher filtering effect.

01 January 2021

Since 1 January 2020 the new so called Large liberation tax package (Velký liberační balíček) is in force. It has been introduced by the Ministry of Finance of the Czech Republic . The most important measures are the following:

  • Postponement of tax obligations to all entrepreneurs whose activities were restricted or prohibited - entrepreneurs whose primary activity is subject to government bans or restrictions have now automatically deferred all VAT payments until the end of the year and waived deposits on income tax and road tax.
  • Reduction of VAT rates (rate 10%) - for the faster recovery of the affected businesses , the significant reduction in VAT has been introduced (valid for e. g. on draft beer, catering services, accommodation and cultural services, operation of ski lifts, access to sports events, and sports facilities).
  • Road tax reduction will bring a direct decrease of 25% in fixed costs for operators of vehicles over 3.5 tons.
  • Abolition of real estate acquisition tax, which should support the real estate market.
  • Taking into account the individual's difficult situation - if necessary, it is possible for Financial Administration of the Czech Republic to use the most common individual tools to take into account the difficult situation of tax subjects (tools like tax deferral, reduction or cancellation of deposits, the possibility to request an extension of selected deadlines etc.). General waiver of the administrative fee for submitting applications to the tax or customs office.

Use of measure

Information not available yet.

Target groups

Workers Businesses Citizens
Applies to all workers Applies to all businesses Applies to all citizens

Actors and funding

Actors Funding
National government
Company / Companies
No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Consultation through tripartite or bipartite social dialogue bodies Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Peak or cross-sectoral level

Involvement

Social partners, which are members of the tripartite body (Council of economic and social agreement, Rada hospodářské a sociální dohody, RHSD) were informed and consulted in both formal (requested by institutional settings) and informal ways. They were not involved into the management of policy measures.

Views and reactions

Supportive. In general, not all suggestions to the proposal of policy measure made by social partners have been accepted, however, they were ready to compromise.

Sources

  • 13 March 2020: MF CR: MF ČR will extend the deadline for tax return (MF ČR: MF ČR prodlouží termín pro daňové přiznání, promine některé pokuty a 3 měsíce a nebude pokutovat dodržování EET (www.mfcr.cz)
  • 16 March 2020: MF ČR: Financial bulletin 4/2020/MF ČR: Finanční zpravodaj 4/2020 (www.mfcr.cz)
  • 24 March 2020: MF ČR: Financial bulletin 5/2020/MF ČR: Finanční zpravodaj 5/2020 (www.mfcr.cz)
  • 30 March 2020: MF ČR: Guideline for tax payers (MF ČR: Průvodce pro daňové poplatníky v souvislosti s koronavirem) (www.mfcr.cz)
  • 31 March 2020: MF ČR: Financial bulletin 6/2020/MF ČR: Finanční zpravodaj 6/2020 (www.mfcr.cz)
  • 15 April 2020: MF CR: Financial bulletin 7/2020/MF ČR: Finanční bulletin 7/2020 (www.mfcr.cz)
  • 05 May 2020: MF ČR: Financial bulletin 8/2020/MF ČR: Finanční zpravodaj 8/2020 (www.mfcr.cz)
  • 10 June 2020: MF ČR: Financial bulletin 9/2020/MF ČR: Finanční zpravodaj 9/2020 (www.mfcr.cz)
  • 14 October 2020: MF ČR: Financial bulletin 22/2020/MF ČR: Finanční zpravodaj 22/2020 (www.mfcr.cz)
  • 01 January 2021: MF ČR: Big tax liberation package/MF ČR: Velký liberační balíček (www.mfcr.cz)

Citation

Eurofound (2020), Tax liberation and stabilisation packages, measure CZ-2020-12/286 (measures in Czechia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/CZ-2020-12_286.html

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