The compensation bonus represents direct support for businesses affected not only by the effects of government measures, but also by the pandemic as such. At the end of February, a new law passed the legislative process that builds on the current form of this support. In addition to other minor changes, the amount of support was increased from CZK 500 to CZK 1,000 per day. The approved legal regulation of the new compensatory bonus is in many respects similar to the current regulation under Act No. 461/2020 Coll., but it should be a simpler and clearer tool for a wider range of applicants.
Compensation bonus under Act No. 461/2020 Coll.
According to the current legislation, to assess the existence of the claim itself, it is necessary to determine whether more than 50% of the applicant's income came from a specific activity in the period from 1 June to 30 September 2020. If so, then to be entitled to a compensation bonus, it is essential that this dominant activity be prohibited or at least 80% restricted.
How can I claim a bonus?
To obtain a compensation bonus under this original legal regulation, it is necessary to fill in the application for a compensation bonus either online or via a printed form. The completed application is submitted to the locally competent tax office, by e-mail, data box, via the Electronic Filing for Financial Administration (EPO) application, by post or in person at the registries. The following deadlines must be met:
5th bonus period
25 December 2020 – 23 January 2021
Can be submitted by 24 March 2021
6th bonus period
24 January 2021 – 15 February 2021
Can be submitted by 16 April 2021
"New" compensation bonus under Act No. 95/2021 Coll.
The "new" law on the compensation bonus assumes that the compensation bonus will be paid at least in February and March retroactively (the bonus period here is one calendar month). The government may subsequently set additional calendar months in 2021 as a bonus period, provided that crisis measures continue in these months. However, it is no longer necessary for a state of emergency to be declared.
The "new" compensatory bonus, like the existing compensatory bonus, represents a refund of income tax to be paid by the tax authorities. Already during the legislative process, the Ministry of Finance stated that it will again be in a similar form as in the case of the current compensation bonus.
In addition to a higher amount of the bonus, i.e. CZK 1,000 per day, the new legislation introduces a different way of verifying the condition for entitlement. The drop in income from the sale of goods or services will now depend on the calendar month preceding the given bonus period. This month's revenue will be compared with the monthly average revenue for the quarterly comparison period from before the restrictive measures were introduced. If the comparison shows that the income drop has reached at least 50%, the applicant will be entitled to a compensation bonus. The method of verification is clearer in a specific case: in relation to the application for the compensation bonus for the month of February 2021, it will be necessary to compare the income for January 2021 with the monthly average for the period of November 2019, December 2019 and January 2020.
Overlapping bonus periods
If the applicant submits an application according to the current rules for the 6th bonus period (from 24 January 2021 to 15 February 2021), for which it receives CZK 500 per day, and at the same time also applies for a "new" compensation bonus, then both bonuses will be mutually offset. In other words, the applicant will be able to receive a total of CZK 1,000. The amounts of both bonuses are not added (the business does not receive CZK 1,500 per day), but there is also no situation where the business would lose the right to the remaining part up to the total amount of CZK 1,000 after the previous payment of the CZK 500 bonus.
Kateřina Moravcová, Paralegal