Government to propose lowering VAT on accommodations and tickets, has decided to open all road and railway crossings with Germany and Austria

Organisers of sports and cultural events as well as those who run accommodation services could save five percent off VAT. Truckload hauliers could even save a quarter on the road tax. This as envisaged by a new bill amending certain acts in the field of taxation that was approved by the Andrej Babiš government on Monday 25 May 2020.

The bill, which the government wants to pass in Parliament in a state of legislative emergency, is meant to help sectors that are among the hardest hit in the current coronavirus crisis. The anti-crisis tax package presented by the Ministry of Finance contains a cut to the value-added tax in the field of accommodation services, tickets to cultural and sports events, admission to sports grounds, ski lift passes and the entrance fee to saunas and other such facilities, all from the current 15 down to 10 percent.

At the same time the proposal contains a reduction of 25 percent on the road tax for trucks over 3.5 tonnes, retroactively back to the start of 2020. It also shortens the deadline for farmers to get back the overpaid excise duty on "green diesel" and introduces retroactive application of tax losses for the income tax of all natural and legal persons. They will now be able to apply tax loss for the two taxation periods preceding the tax period in which the loss was incurred. You can find the details in the Ministry of Finance's press release (in Czech language).

The government has also approved a draft act on waiving social security premiums and the contribution to the state employment policy paid by employers as taxpayers in connection with the emergency measures during the epidemic in 2020. If Parliament approves the proposal for the "Antivirus C" programme, employers with fewer than 50 employees can have their payments of social security premiums and state employment policy contributions waived for the months of June, July and August 2020.

In order for this relief to be granted, the employer must meet several conditions. The main one is that the employer did not significantly reduce its employment levels during the coronavirus crisis and at the same time did not reduce the volume of wages provided to its employees more than 10 percent compared to March 2020. The employer also had to have paid the insurance premiums its employees are obliged to pay by the set deadline and in the amount laid down by the Act on Social Security Premiums, and not have drawn funds from the Antivirus B programme for the given calendar month. Further information is contained in the Ministry of Labour and Social Affairs' press release (in Czech language).

The government has taken under advisement several Ministry of Health emergency measures that alter or amend the current rules. Effective 26 May the Ministry of Health has repealed the dedicated shopping hours for seniors, discontinued the requirement for barbers, hairdressers, pedicurists, masseurs and other similar professions to use a protective shield in addition to a face mask and withdrawn the obligation for a mask to be worn at work assuming the person is working in one spot at least two metres from others, as well as for lifeguards, swimming coaches and swimming instructors also with the two-metre condition, and also public transport drivers who do not come into direct contact with passengers.

The health minister also decided that it would no longer be possible to end quarantine using a COVID-19 rapid test, but only with a PCR test. In cooperation with the minister of education, youth and sport, he also ruled on a voluntary return to school instruction for students of special primary schools, secondary schools and conservatories for the purpose of practical instruction starting 1 June. A week later, starting 8 June, upper-year pupils of primary schools and students of secondary schools, conservatories and higher vocational schools will also be able to return to school voluntarily for consultations or homeroom classes. In all cases, students may only comprise groups of at most 15 individuals. More on the next stages of relaxing school restrictions can be found in the Ministry of Education, Youth and Sport's press release (in Czech language).

The government has also approved an easing of the regime at state borders. Starting 26 May the exemption to the ban on foreigners entering the Czech Republic will also apply to EU citizens and foreigners with the status of long-term resident in another EU Member State entering the Czech Republic for a period of no longer than 72 hours for the purpose of conducting economic activity, or to visit a person with whom they have a demonstrable family relationship, including long-term partners, as well as for EU citizens that are entering the Czech Republic to conduct economic activity or study at a university and food production workers who have been issued a visa effective from 11 May 2020 onward. Everyone will have to produce proof of a negative COVID-19 test upon entry. You can find an overview of the Ministry of Health's emergency measures (in Czech language).

The government also expanded the list of border crossings where it is permitted to cross the borders with Austria and Germany to include all remaining road and railway crossings, the Hřensko river crossing and also the airports Brno-Tuřany, Karlovy Vary, Ostrava-Mošnov and Pardubice. General checks at the borders have also been discontinued and all crossings will once again be able to be used 24 hours a day. More in the Interior Ministry's press release (in Czech language).

The government also took up the future of the Smart Quarantine project. As part of the "Smart Quarantine 2.0" project prepared by the Ministry of Health, a new department will be established at the ministry – Emergency Operating Centre – reporting directly to the chief medical officer. This centre will work around-the-clock and will analyse risks with an impact on public health, propose solutions and run and develop the Smart Quarantine 2.0 system. Also involved in the Smart Quarantine 2.0 system will be regional hygiene stations, the National Institute of Public Health, public health institutes, and the Institute of Health Information and Statistics. The Ministry of Health is also gradually taking over the instruments developed by the Czech Army under the original Smart Quarantine project. The state enterprise NAKIT is covering IT for the project.

Cabinet has decided to establish a position of a government commissioner for medical science and research under the Office of the Government effective starting 1 June 2020 and has named Dr Roman Prymula to the post. Among its most important tasks will be producing and submitting a National Concept for Medical Research and overall coordination of the issue of medical science and research with the individual central state administration bodies and other entities.

Ministers also discussed and approved the rules for the new programme for providing aid through the Farming and Forestry Relief and Guarantee Fund, Operation 2020 – reducing loan principal. The programme is intended for small and medium-sized enterprises in the field of primary agricultural production whose business has suffered losses in connection with the COVID-19 pandemic. Clients will be able to apply for financial support of up to CZK 150 000, which must not however exceed 50 percent of the outstanding loan principal. The details are in the Ministry of Agriculture's press release (in Czech language).

Cabinet also took up a proposal for the Czech Republic's next steps in filing an action to annul the European Commission's implementing decision of 30 March 2020 on stopping interim payments associated with the Czech Republic's Rural Development Programme for the period 2014–2020 and connected to the expenditures made in the period from 16 October 2018 to 31 December 2018 along with a proposal for further steps in a case already underway at the EU Court of Justice. The Czech Republic will withdraw its action for annulment of the European Commission's implementing decision of 28 November 2019 at the EU Court of Justice and file a new action for annulment of the European Commission's implementing decision of 30 March 2020 on suspension of interim payments associated with the Czech Republic's Rural Development Programme for the period 2014–2020 and connected to the expenditures made in the period from 16 October 2018 to 31 December 2018. 

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