Announcement of New Programmes Focusing on the Fight Against the Coronavirus

Tax

Announcement of New Programmes Focusing on the Fight Against the Coronavirus

The government has approved new COVID programs to help businesses and entrepreneurs eliminate or mitigate the effects of a coronavirus pandemic. Businesses can receive a rent allowance of up to 50 percent if the owner reduces their rent by 30 percent. Further assistance takes the form of loan guarantees. 150 billion crowns are set aside for them and up to 150,000 entrepreneurs can reach them. The government promises from these measures that up to CZK 500 billion will be released to support companies through the so-called leverage effect.

COVID Rent

The programme will be focused on mitigating the impacts of the coronavirus pandemic on companies which were forced to close their operations in relation to the measures taken by the Government against the spread of the coronavirus. The subsidy from this programme will be in the form of a contribution for commercial leases for businesses.

Who can request the subsidy:

businesses which were forced to close and businesses which ran in a restricted mode (i.e. sale through a window or e-shop).

What is eligible for the subsidy:

rental arising from contracts concluded before 12 March 2020

Amount of the subsidy:

maximum of CZK 10 million for the period from April to June (inclusive)

Aid intensity:

contribution of 50% of the rent under the condition of payment of 30% by the lessor and 20% by the tenant
contribution of 80% of the rent in case of public entities or rent paid to the state

Application acceptance:

within a few weeks

No other subsidy can be used for rent expenses. A document proving the payment of rent for the previous months (for January and February) and proof of payment of VAT for the period from 1 April to the date of submitting the subsidy application have to be presented.

COVID III

Since the interest in the programmes COVID I and COVID II was huge, another programme, with the number III, was approved. It is focused on mitigating the coronavirus impacts on businesses and it takes the form of the Czech-Moravian Guarantee and Development Bank’s guarantees for operating loans provided by the cooperating commercial banks. These operating loans have to be granted by 31 December 2020.

Who can request the guarantee:

business with up to 500 employees

What is eligible for the guarantee:

operating loans from commercial banks (i.e. for wages, rent, energy bills etc.)

Amount of the guarantee:

maximum amount of the guarantee for a loan of CZK 50 million

Aid intensity:

a guarantee up to 90% of a commercial loan principal for businesses with up to 250 employees
a guarantee up to 80% of a commercial loan principle for businesses with 250 to 500 employees

The maximum guarantee period is three years. There are no financial contributions for the payment of interest. The aid is granted in the form of a loan application with a cooperating bank that has a contract with the Czech-Moravian Guarantee and Development Bank. Negotiating loans with the banks is already possible. Drawing the loans will be possible within 1 or 2 weeks.