ENTREPRENEURS AND BUSINESS RELATIONS

LAST UPDATE ON March 10, 2022, 11 a.m.

Impact of pandemic measures on contractual relations – in general

Can changes related to government actions and the coronavirus pandemic warrant a reduction or increase in the contract price or other changes to contract terms?

It is not possible to unilaterally change the price or other terms of the contract unless there is a gross disproportion between the parties’ performance, and the parties have not contractually excluded the application of the provisions of Section 1765 or Section 2620 (2) of the Civil Code (the parties have assumed the risk of a change of circumstances in the contract).

Could the changes related to government measures and the coronavirus pandemic be grounds for non-performance of contractual obligations?

The coronavirus, or measures related to it, may justify non-performance of contractual obligations if they constitute a ‘force majeure’ and the parties have agreed so in the contract. If there is no force majeure provision in the contract, the law may be used – if a party is temporarily or permanently prevented from performing an obligation by an extraordinary, unforeseeable and insurmountable obstacle arising independently of its will, such party is not obliged to compensate for the damage.

Can changes related to government measures and the coronavirus pandemic be grounds for termination of contractual obligations?

Government measures that prohibit a wide range of activities may cause the termination of a contract obligation due to an inability to perform. However, this is only if performance cannot be provided even under difficult conditions, at greater cost, with the assistance of another person, or after a specified period of time. Some performance may also become illegal.

Other measures concerning entrepreneurs

Currently effective concessions and assistance for entrepreneurs

COVID – Advent markets

  • for stallholders and market operators affected by the ban on Advent markets
  • for the period from November 26 to December 25, 2021
  • stallholders – one stand CZK 5,000 / day, two stands CZK 8,000 / day, 3 or more stands CZK 11,000 / day, total maximum CZK 330,000
  • market organizers – up to 80% of the costs of organizing the canceled market, maximum CZK 5,000,000
  • only for canceled markets, not limited ones
  • applications can be submitted from 1.3.2022, more information here – in Czech

COVID – Uncovered costs – Sector support

  • only for the tourism sector, i.e. providers of catering services, providers of short-term and recreational accommodation services, laundries, travel agencies and offices and organizers of events (organizers of sports, cultural, conference, trade fair and other events, including related technical services)
  • for entrepreneurs whose turnover decreased by at least 50% compared to the same period in 2019 (2018)
    • the relevant period from 1 November to 31 December 2021
    • support in the amount of 50% of uncovered costs, maximum CZK 1,500,000
  • for event organizers whose turnover decreased by at least 50% compared to the same period in 2019 (2018)
    • decisive period 1 November 2021 to 28 February 2022
    • support in the amount of 70% of uncovered costs, maximum CZK 3,000,000

COVID 2022 – Sector Support

  • for entrepreneurs in the tourism sector (see above) with a decrease in sales for the relevant period by at least 50%
    • for the period from 1 November to 31 December 2021
    • for each employee in an employment relationship of CZK 500 / day, maximum CZK 1,500,000
  • for event organizers (see above)
    • from November 1, 2021 to February 28, 2022
    • for each employee in an employment relationship of CZK 500 / day, maximum CZK 3,000,000

COVID BUS

  • for tour bus operators whose turnover decreased by at least 50% from 1 November to 31 December 2021 compared to the same period in 2019
  • maximum CZK 2.5 million, the amount of support is derived from the emission class of the bus and capacity according to seats
  • the aid will be evaluated and reimbursed in the first half of 2022

Applications in individual calls of the programs COVID 2022 – Sectoral Support, COVID – Uncovered Costs – Sectoral Support and COVID – Bus and COVID – Advent Markets cannot be combined with each other.

Compensation bonus

  • for partners of s.r.o. and self-employed up to CZK 1,000 per day
  • for persons working at DPP / DPČ CZK 500 per day
  • the first bonus period from November 22 to December 31, 2021 (applications can be submitted until 1.3.2022)
  • the second bonus period from January 1 to 31, 2022 (applications can be submitted until 1.4.2022)
  • conditions: a drop in revenue corresponding to sales of at least 30%, in the compared period compared to the average monthly amount of revenue in the comparison period. The compared period is the calendar month of the bonus period, ie December 2021, resp. January 2022. The comparison period is then any three consecutive calendar months in the relevant period from June to October 2021.

Postponement of Electronic Register of Sales (EET)

  • postponing the launch of the third and fourth waves of EET and discontinuing the obligation to use EET for the two waves already launched
  • obligation to use EET postponed until 1 January 2023
  • more information here

Covid III Guarantee – Invest

  • intended for sole traders and businesses with up to 500 employees whose economic activities are limited
  • the possibility to obtain a guaranteed loan for operating costs and investments (for operation: until 31 December 2021 or until the allocation is exhausted
    for investments: until 30 June 2027)
  • extension of the guarantee period to 6 years
  • the maximum loan amount must not exceed CZK 50 million
  • more information here

COVID Sport Guarantee

  • Guarantee program for small and medium-sized sports entrepreneurs
  • Czech-Moravian Guarantee and Development Bank will provide a guarantee for an operating loan of up to CZK 15 million, up to 80 % of the principal
  • period of guarantee: 3 years
  • the possibility to apply for a financial contribution for the payment of interest up to CZK 1 million
  • more information here

Covid – Travel Agencies Warranty

  • especially for small and medium-sized travel agencies
  • objective: to fulfil the legal obligation to insure against insolvency
  • maximum amount: up to 75 % of the required deductible of the CK up to a limit of 30 % of the insurance benefit, but no more than CZK 4 million
  • the aid will be granted for a period of 1 calendar year starting between 1 October 2020 and 31 December 2021

Other concessions and assistance for entrepreneurs

Antivirus A

  • for employers whose employees have been quarantined or isolated due to COVID-19
  • a maximum of 80% of the salary including deductions will be reimbursed, up to a maximum of CZK 39 000 per month per employee
  • period of eligibility of expenditures extended until 28 February 2022

Antivirus B

  • compensates employers for the costs of employees who, as a result of the effects of a pandemic, find themselves in a barrier to work on the part of the employer
  • 60% wage compensation including deductions will be reimbursed, up to a maximum of CZK 29,000 per month per employee
  • the disbursement of funds was stopped on 1.1.2022, only the costs for November and December will be disbursed

Covid – Spa 2021

  • by supporting the demand for health and preventive stays in spas
  • decisive period: 1 January 2021 – 31 December 2021
  • specific conditions here

Emergency Financial Assistance (MOP) Covid-19

  • for people who have been proven to be in financial need due to coronavirus
  • the possibility of applying for a one-off emergency aid benefit
  • also applies to parents of children under 10 who stay at home on sick leave

 

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