ENTREPRENEURS AND BUSINESS RELATIONS

LAST UPDATE ON November 30, 2021, 1pm

Impact of pandemic measures on contractual relations – in general

Can changes related to government actions and the coronavirus pandemic warrant a reduction or increase in the contract price or other changes to contract terms?

It is not possible to unilaterally change the price or other terms of the contract unless there is a gross disproportion between the parties’ performance, and the parties have not contractually excluded the application of the provisions of Section 1765 or Section 2620 (2) of the Civil Code (the parties have assumed the risk of a change of circumstances in the contract).

Could the changes related to government measures and the coronavirus pandemic be grounds for non-performance of contractual obligations?

The coronavirus, or measures related to it, may justify non-performance of contractual obligations if they constitute a ‘force majeure’ and the parties have agreed so in the contract. If there is no force majeure provision in the contract, the law may be used – if a party is temporarily or permanently prevented from performing an obligation by an extraordinary, unforeseeable and insurmountable obstacle arising independently of its will, such party is not obliged to compensate for the damage.

Can changes related to government measures and the coronavirus pandemic be grounds for termination of contractual obligations?

Government measures that prohibit a wide range of activities may cause the termination of a contract obligation due to an inability to perform. However, this is only if performance cannot be provided even under difficult conditions, at greater cost, with the assistance of another person, or after a specified period of time. Some performance may also become illegal.

Other measures concerning entrepreneurs

Currently effective concessions and assistance for entrepreneurs

Antivirus A extension

  • for employers whose employees have been quarantined or isolated due to COVID-19
  • a maximum of 80% of the salary including deductions will be reimbursed, up to a maximum of CZK 39 000 per month per employee
  • period of eligibility of expenditures extended until 28 February 2022

Antivirus B Extension 

  • compensates employers for the costs of employees who, as a result of the effects of a pandemic, find themselves in a barrier to work on the part of the employer
  • 60% wage compensation including deductions will be reimbursed, up to a maximum of CZK 29,000 per month per employee
  • period of eligibility of expenditure from 1.11. 2021 to 28.2.2022

Covid 2021

  • relaunch of the program during November 2021
  • a comprehensive program to replace previous sectoral programs from March 2021
  • the program is intended for companies whose business has been restricted and their turnover has decreased by at least 30%
  • maximum amount of aid: CZK 300 times the number of employees times the number of days for which the entrepreneur applies for support (so-called cooperating persons will also be considered employees)
  • a maximum of EUR 1,8 million per one beneficiary
  • decisive period: from 1 November to 31 December 2021 with the possibility of extension according to the situation
  • details available here

Covid – uncovered costs

  • Covid 2021 program alternative
  • intended for entrepreneurs who are at a loss due to a pandemic, with payment of a part of uncovered fixed costs
  • conditions: a decrease in sales by at least 30% compared to the same period in 2019 and the fact that the entrepreneur will be at a loss at that time
  • maximum amount of support: 40% of uncovered costs with a limit of CZK 20 million  per applicant
  • decisive period: from 1 November to 31 December 2021 with the possibility of extension according to the situation
  • details available here

Compensation bonus

  • for partners of s.r.o. and self-employed up to CZK 1,000 per day
  • for persons working at DPP / DPČ CZK 500 per day
  • the first bonus period from November 22 to December 31, 2021
  • the second bonus period from January 1 to 31, 2022
  • conditions: a drop in revenue corresponding to sales of at least 30%, in the compared period compared to the average monthly amount of revenue in the comparison period. The compared period is the calendar month of the bonus period, ie December 2021, resp. January 2022. The comparison period is then any three consecutive calendar months in the relevant period from June to October 2021.

 

 

Postponement of Electronic Register of Sales (EET)

  • postponing the launch of the third and fourth waves of EET and discontinuing the obligation to use EET for the two waves already launched
  • obligation to use EET postponed until 1 January 2023
  • more information here

Covid III Guarantee – Invest

  • intended for sole traders and businesses with up to 500 employees whose economic activities are limited
  • the possibility to obtain a guaranteed loan for operating costs and investments
  • extension of the guarantee period to 6 years
  • the maximum loan amount must not exceed CZK 50 million
  • more information here

Covid Plus Guarantee

  • designed for large enterprises with at least 250 employees
  • conditions: exports must account for at least 20% of the company’s sales
  • the guarantee covers 80% of the loan principal
  • loan amount: CZK 5 million – CZK 2 billion
  • guarantees extended until 31 December 2021
  • more information here

COVID Sport Guarantee

  • Guarantee program for small and medium-sized sports entrepreneurs
  • Czech-Moravian Guarantee and Development Bank will provide a guarantee for an operating loan of up to CZK 15 million, up to 80 % of the principal
  • period of guarantee: 3 years
  • the possibility to apply for a financial contribution for the payment of interest up to CZK 1 million
  • more information here

Covid – Spa 2021

  • by supporting the demand for health and preventive stays in spas
  • decisive period: 1 January 2021 – 31 December 2021
  • specific conditions here

Covid – Travel Agencies Warranty

  • especially for small and medium-sized travel agencies
  • objective: to fulfil the legal obligation to insure against insolvency
  • maximum amount: up to 75 % of the required deductible of the CK up to a limit of 30 % of the insurance benefit, but no more than CZK 4 million
  • the aid will be granted for a period of 1 calendar year starting between 1 October 2020 and 31 December 2021

Emergency Financial Assistance (MOP) Covid-19

  • for people who have been proven to be in financial need due to coronavirus
  • the possibility of applying for a one-off emergency aid benefit
  • also applies to parents of children under 10 who stay at home on sick leave

Tax relief

  • deferral of tax obligations for all businesses whose activities have been immediately restricted or banned
  • the institute of tax loss reversal
  • general waiver of the administrative fee for submitting an application to the tax or customs office
  • general waiver of VAT on the free of charge supply of basic protective equipment until 30 June 2021
  • reduction of VAT rates on draught beer, catering services, accommodation and cultural services, operation of ski lifts, admission to sporting events and sports facilities
  • 25 % road tax reduction for vehicles over 3.5 t
  • abolition of real estate acquisition tax
  • permanent exemption from tax for unconsumed beer destined for disposal or reprocessing from 1 January 2021

 


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