Czech Business Today

The fast spreading of coronavirus has impacted the whole world and the EU is no exception. Although the situation in the Czech Republic is not as critical as for example in Italy, the Czech government decided to implement measures that should limit the increase of infected persons to the minimum. Needless to say that restrictive measures will have an impact on entrepreneurs.

The Czech Chamber of Commerce predicts that in case of a long-term crisis of more than six months it could paralyze the entire economy. According to a flash survey carried out by the Czech Chamber of Commerce from 14-16^th March among 1,323 respondents, the biggest challenge is the decrease in sales (60% of companies) followed by the fear of employees (28%). Problems mainly relate to domestic business activities (82% versus 18% of mostly foreign operations). Only 4% of companies do not expect a drop in sales, the largest share of respondents (28%) expect a drop in sales in the range of 20 to 40%.

According to a survey of the Confederation of Industry of the CR among 350 industrial companies conducted in the early phase of the pandemia, a third of them had to place one or several employees in quarantine and more than a third expected to have problems with the lack of components or raw materials and therefore a decrease in demand.

In order to help Czech entrepreneurs, the Ministry of Finance issued a so-called liberation tax package, which allows deferred tax payments (without fees, without interest and fines). For VAT payments, businesses must ask the competent tax authority to delay payments and charges incurred in connection with the COVID-19 situation. Filing personal income tax and corporate income tax can be submitted any time by 1^st July 2020 instead of 31^st March 2020.

The Government has also approved a national COVID loan programme in record-breaking time in order to facilitate access for small and medium-sized enterprises to operating financing, in cases where their economic activities have been restricted due to the coronavirus. The interest-free loans is provided by the Czech-Moravian Guarantee and Development Bank (ČMZRB). Czech credit insurance corporation EGAP prepared a package of measures to support exporters. It includes a fast track, i.e. priority treatment of insurance claims for exporters seeking new customers as a result of the global coronavirus pandemic; significantly reduced fees for exporters and reduced time necessary for the recognition of claims for insured loans from 6 months to 3 months and for insured guarantees from 3 months to 1 month, which will help resolve any cash flow problems of the exporter.

On 17^th March, the Government adopted quick compensations for employers in case of quarantine and closing down of shops. The proposal for a special benefit similar to nursing for self-employed persons who are unable to pursue their business as a result of caring for children for whom schooling has been abolished is already in an accelerated legislative process. The discussion with the Government on further compensations continues on topics such as addressing any special benefit or subsidy program for self-employed persons who, due to an emergency situation, do not have income from their gainful activities.