„Revival“ of the compensation bonus
In November, the Czech government approved a draft law from the Ministry of Finance on the compensation bonus. This is a continuation of the support that already existed in previous waves of the pandemic, which, as before, is aimed at compensating self-employed persons and partners of small, limited liability companies (these are companies with a maximum of two partners or family businesses).
Under this bill, the compensation bonus will be paid in the amount of CZK 1,000 for each day for self-employed persons or partners of limited liability companies. Sole traders in quarantine or isolation should always be entitled to at least CZK 500 per day. Workers on an agreement outside employment can also apply for the same amount.
As before, the business must be the main source of income for the bonus claimant.
The Ministry of Finance has planned two bonus periods so far. The first from 22 November 2021 to 31 December 2021, and the second from 1 January to 31 January 2022. The government may subsequently set further bonus periods by regulation, for one calendar month at a time, in view of the spread of the pandemic.
Those whose income falls by at least 30% in the bonus period compared to the average monthly income in the comparison period will be eligible for a compensation bonus. The comparison period is any three consecutive calendar months from June through October 2021. For seasonal businesses that do not operate over the summer, income in the bonus period will be compared to income from the period of 1 November 2019 through 31 March 2020 (i.e. the comparable winter period before the pandemic began).
As before, this compensation bonus will be a refund of income tax on employment income, which will be paid by the tax authorities upon request.
The government bill provides that applications can be submitted at the earliest after the end of the bonus period, i.e. in the period when it will be possible to accurately quantify the drop in the amount of sales. Applications will be submitted within two months after the end of the relevant bonus period, and applicants will be able to use a specially set up website, submit an application by e-mail, data box or mail, or apply in person at the tax office.
All further information on the compensation bonus can be found on the website of the Ministry of Finance here.
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