Tax 

IT Firms at Threat of Not Receiving Subsidies

During the compliance audit of public support rules, it was noted that payroll costs of employees that had already worked at the firm could be reimbursed as part of the information and communications technologies projects under the ICT and shared services programme. However, according to the EU directives, support may only be provided to newly created jobs. Two already concluded calls are thus in breach of public support rules.

The MoIT has informed subsidy recipients in a dispatch that, under the current circumstances, their payment requests will be suspended. The subsidy recipients affected must state, by 31 May 2018, whether they will additionally create the jobs claimed or not. If existing employees had been transferred to newly created jobs as part of the project, it is necessary to replace their original positions.

The MoIT has stipulated a period of three years within which the jobs must be created or replaced, which also applies to concluded projects. If the jobs claimed are created or replaced, the subsidy recipients will have amendments issued for the legal act, following the signature of which the reimbursement of payment requests will be renewed. If the subsidy recipient decides not to create or replace the new jobs, the payroll costs of employees not contributing to the net increase in the headcount of the given firm will not be considered eligible.

Given the matters outlined above, appendices to calls will be amended accordingly. New methodology is also being awaited, which should explain the above matters in greater detail. Given that it is a rather substantial change to the programme setup, the MoIT has also decided to set up a special e-mail and telephone line for subsidy recipients. The prevailing uncertainty, awaiting of a new methodology and changing rules may contribute to the growing lack of interest on the part of companies in drawing subsidies. This is on top of the fact that the Czech Republic is certainly not one of the countries having a keen interest in subsidy support.

A total of CZK 117 billion has been allocated for the Operational Programme for 2014-2020, yet only CZK 6.7 billion had been paid out as of 16 April 2018. Some firms want to defend themselves, refusing to bear the consequences of errors made by civil servants. Therefore, it is not ruled out that the state will be challenged in legal disputes.

Grants and Incentives dReport newsletter

Upcoming events

Seminars, webcasts, business breakfasts and other events organized by Deloitte.

    Show morearrow-right