New subsidy programs
We would like to draw your attention to subsidy programs that were announced at the beginning of April. After the announcement, certain conditions of the program were further clarified; the text below draws from information announced on 9th April 2021 on the Ministry of Industry and Trade web. There are two programs, from which entrepreneurs can choose which they will utilize. The selection has to be considered carefully, so that the program which brings the most support can really bring the highest support.
Program COVID Nepokryté náklady (tr. Uncovered expenses)
An authorized applicant is an entrepreneur (an individual or corporation) performing entrepreneurial activity, whose turnover in the context of their entrepreneurial activity decreased by at least 50 % during the applicable period. The applicant selects as the comparative period the period from 1st January 2019 to 31st March 2109 or from 1st January 2020 to 31st March 2020. An applicant that was established or that commenced operations/activity (or more precisely, became a self-employed person) only after 1st January 2020 can select any three consecutive months in 2020 as the comparative period.
The request can be filed from 19th April 2021 from 9:00 a.m. to 19th June 2021 via the AIS MPO information system.
The applicable period for which support is provided is 1st January 2021 to 31st March 2021.
The support amount is 60 % of uncovered expenses for the applicable period or, more precisely, 40 % of uncovered expenses for entrepreneurs with participation capital from the state or from CR territorial authorities.
The maximum support amount is CZK 40M per single applicant.
What conditions have to be met in order for the support to be recognized? The applicant has to substantiate, along with a turnover decrease by 50 %, uncovered expenses for the applicable period or, more precisely, a loss reduced by the subsidy provided to the applicant.
It is also necessary to prove that:
- The adjusted profit and loss statement for the applicable period has been compiled pursuant to the requirements and criteria stated in Supplement 2 of the Call. This profit and loss statement draws from the binding format of the financial statement, although numerous specific rules have to be respected when compiling it. Of these we select especially:
- In the amended Act, one can include only expenses that are tax-deductible expenses pursuant to the Income Tax Act.
- The statement may contain amortization of tangible assets only up to 3/12 of the tax amortization amounts calculated according to uniform or accelerated depreciation pursuant to the Income Tax Act.
- The statement may contain depreciations and adjustment items to receivables only if they are a tax expense.
If a loss of CZK 5M and more is reported in the profit and loss statement, it is necessary to substantiate the Auditor’s Report to the Adjusted Profit and Loss Statement. Verification will be carried out pursuant to the international auditor’s standard for assurance engagement – ISAE 3000, Assurance engagements other than audits or reviews of historical financial information, as an assurance engagement providing reasonable certainty. In this verification, the auditor has to select a materiality amounting to 3 % of total expenses (operational and financial) stated in the Adjusted Profit and Loss Statement.
- The adjusted profit and loss statement for the applicable period is compiled pursuant to the requirements and criteria stated in Supplement 2 of the Call.
- An overview of all subsidies and funds which the applicant acquired or which it requested and on which no decision has been taken on the day the request was filed.
- The beneficiary’s statement of honour that it is an authorized applicant and meets all the conditions of the Call.
Program COVID 2021
The authorized applicant has to perform entrepreneurial activity and has to be an individual or a corporation established pursuant to private rights or a public-benefit corporation. As a result of the COVID-19 pandemic, the authorized applicant’s turnover in the context of its entrepreneurial activity has to have decreased by at least 50 % for the compared period as against the comparative period. For the purposes of this calculation, turnover is understood as proceeds from own performance and goods. The compared period is the period 1st January 2021 to 31st March 2021. As the comparative period, the applicant has to select the period of 1st January 2019 to 31st March 2019 or 1st January 2020 to 31st March 2020. An applicant which was established or began operations/activity after 1st January 2020 has to select as the comparative period and three consecutive months in 2020.
An authorized applicant has to have at least one employee expressed as the equivalent of full-time employment (FTE).
The request can be filed as of 12th April 2021 from 9:00 to 31st March 2021 until 16:00 by means of the information system accessible from Portál AIS MPO.
Support is provided for employees at an amount of CZK 500 per day, for the period of 11th January 2021 to 31st March 2021.
Support from the program for this period can be combined with the support from Antivirus, but it cannot be combined with the support from the parallel COVID – Nepokryté náklady (Uncovered Expenses) program. The support cannot be combined with the new compensation bonus for February and March 2021 either.
The support is provided for operational expenses and the maintenance of entrepreneurial activities such as personal expenses, expenses for material, services (incl. leasing, for instance), depreciation, tax and fees, fixed costs etc.
For the purposes of the Program, only employees in an employment status are considered to be employees; further, so-called co-operating persons pursuant to Act No. 586/1992 Coll., Income Tax Act (in the case of applicants – individuals) and, further, executives with an agreement to perform an executive function. In all cases, only employees who were reported for payment of insurance premiums at the Czech Social Security Administration (ČSSZ) as at 11th January 2021 are counted.
The number of days is given by the period between 11th January 2021 and 31st March 2021 (a total of 80 days). If the applicant had 1 to 3 employees expressed as FTEs, the support has been fixed at an amount of CZK 1,500 per day.
In the case of employees on part-time or short-term employment, the applicant factors the pertinent coefficient as a conversion to full time employment (e.g. if the employer has 10 people on part-time employment, the calculation will be 10 x 0.5 x 500, and can thus request CZK 2,500 per day).
The other conditions for the applicant are similar to those in the other COVID programs, i.e. the applicant, for instance, is not bankrupt, is not an unreliable payer, does not have any overdue arrears in relation to the state budget, is not being liquidated etc.
You can find further information on this area on the web: https://www.mpo.cz/covid-2021.