The Recovery Package in the context of tax changes
Following the Government announcement on the Recovery Package, the related amendment to the tax regulations was published. Below we summarise a selection of the most important changes in this area.
In September 2019, the government programmes of economic migration were harmonised and simplified, which resulted in three basic projects: Qualified Worker Programme, Highly Qualified Worker Programme, and Key and Research Staff Programme. All these programmes have one thing in common: they can react to a current situation on the job market, simplifying and accelerating migration procedures. Participation in one of these programmes gives Czech companies a competitive advantage in employing foreign workers. At present, the programmes also fulfil another function – at the time when Czech embassies abroad have restricted the acceptance of applications for work visas, the programmes are the only way to obtain foreign workers.
To be included in one of the programmes, companies doing business in the Czech Republic need to meet certain programme-specific conditions. Generally speaking, the company has to prove that it has settled all liabilities to the state. By inclusion in the programme, the Company receives certain benefits, such as reduced administrative burden or priority processing of work and residence permits for their future employees. All programmes are within the remit of the Ministry of Industry and Trade and there is no legal entitlement to being included in them.
The Key and Research Staff Programme offers the most benefits and is primarily intended for managers and specialists. If a company applies for being included in this programme, it should meet certain criteria according to the company type. An investment-type company, for example, should have been doing business in the Czech Republic for at least one year and should have at least 50 employees in the Czech Republic and 250 employees globally. The programme is also open to research organisations registered in the list of research organisations, or a technological company that concluded an agreement on research and development cooperation with the said organisation. The programme is also intended for newly established organisations or start-ups, which are subject to different conditions.
After the company has been successfully included in the programme, the foreign worker receives a priority date for applying for a work or residence permit at a relevant embassy of the Czech Republic abroad. The processing of the application for a residence permit is then subject to the Act on the Residence of Foreign Nationals and the Code of Administrative Procedure, with stipulated exceptions. The application included in the programme is processed within 30 days (the statutory deadline commences on the submission date of the application at the relevant embassy) and the residence permit may be valid for up to 2 years (in case of an employee card) or 3 years (in case of an intra-company employee transfer card).
Slowly but surely, the borders of EU member states have begun to open. The possibility to submit an application for a Czech visa at Czech embassies abroad has been suspended due to the coronavirus pandemic; now, however, some embassies are reopening, with participants in the abovementioned government programmes being their priority.
Protective measures, which are regularly published and updated by the Ministry of Health, prescribe which Czech embassies may be reopened, taking into account the current epidemiologic situation in the given country. The latest information about opening times of embassies can be found on the website of the Ministry of Foreign Affairs, which is being updated regularly.
On 1 September 2019, annual quotas were introduced by certain embassies on the number of submitted applications concerning popular long-term residence permits, such as employee cards and long-term business visas. These quotas stipulate the maximum number of applications for these residence permits that may be submitted to the respective embassies. It remains to be seen whether these quotas will decrease any further due to the aggravated economic situation caused by the coronavirus epidemic, as there will be efforts to protect the Czech labour market.
The said economic migration quotas and government-approved programmes are closely related. At Czech embassies in countries such as Ukraine, India, but also Russia (and others), it is very hard, sometimes even impossible to obtain a date for applying for a residence permit, unless the company is included in one of the programmes. For a foreign national whose company is included in a government-approved program, it is, therefore, a great advantage that they are guaranteed a priority date for submitting an application. The Czech embassy in Lvov, for example, has an annual quota of 40,720 applications, out of which 40,000 are allocated to the participants of the Qualified Worker Programme.
One of the popular destinations for third-country qualified workers is the United Kingdom. Since February 2020, the UK has used a new Global Talent Visa programme, replacing the original Tier 1 Visa. In this programme, it is necessary to first ask the UK Home Office (Ministry of the Interior) to recognise the employee in question as a key employee in a specific field, and afterwards apply for the visa separately. If the person in question is recognised as a key employee, it is possible to apply for a visa 3 months before the expected arrival into the country at the earliest. The decision on the granting of the visa should be issued within 3 weeks, with the possibility of the visa being granted for up to 5 years. It is necessary to say that the advantage of this programme is that it has no upper limit for the number of applications to be involved. However, the programme is sometimes criticised for focusing only on “the best” in science, healthcare technology and other related fields, whereas the UK needs educated workers of all levels across all fields. As the Global Talent Visa programme focuses mainly on individuals, the closest to our government programmes is the General Work Visa programme (Tier 2). With this programme, the foreign worker must find employment at a company which is registered as a licensed sponsor and will provide the foreign worker with a Certificate of Sponsorship. In this case, it is also necessary to apply for the visa 3 months before the expected beginning of employment. The decision on the granting of the visa should be issued within 3 weeks (90 days in the Czech Republic) and the visa can be granted for up to 5 years (maximum 2 years in the Czech Republic). However, due to Brexit scheduled for January 2021, it can be expected that the system of recruiting qualified workers into the UK will change.
Another popular destination for qualified workers globally is the Federal Republic of Germany, which recognises various types of residence permits depending on the worker’s qualification. A qualified person is defined as a person with a university degree or a professional qualification after completing a professional course of at least two years. Regardless of whether the person has a university degree or professional qualification, it is first necessary to ask a competent authority to recognise the person’s foreign qualification. In Germany, it is possible to speed up the process of obtaining a residence permit, especially in the case of a qualified foreign worker and an employer authorised by the Immigration Office. The Immigration Office assists the future employer with filing the request for recognition of a foreign diploma and also obtains the consent of the Labour Office (Bundesagentur für Arbeit). When all the conditions for the successful approval of the application have been met, the Immigration Office issues a “preliminary consent”. Only with this preliminary consent is it possible to arrange a meeting for the submission of an application at one of the German embassies. The meeting has to take place within 3 weeks and the decision on the granting of a residence permit takes another 3 weeks. The residence permit is then granted for up to 4 years.
Immigration processes do not have to pose a time-consuming administrative challenge. It is necessary to plan the recruitment of a foreign worker ahead and to use all the available government-approved programmes, intended for not only managers and specialists, but also other qualified workers.
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