Changes to compensation bonus for self-employed
The general public’s response to the government-approved compensation bonus for the self-employed in connection with coronavirus-related emergency measures has been very negative, leading the government to revise the bill. The revised compensation bonus will continue to focus on self-employed persons who cannot fully or partly and beyond a reasonable extent perform their business activity due to a threat to health or due to the governmental emergency measures.
The main change is the adjustment of the criteria for obtaining the compensation bonus. It will no longer be crucial how significant the decrease in the self-employed’s income was in the three calendar months preceding the end of the bonus period compared with similar calendar months of the previous year. From now on, a crucial criterion will be that the self-employed could not have fully or partly performed their activity due to the governmental emergency measures, and that the self-employed must have performed their activities on the date the state of emergency was declared (i.e. 12 March 2020).
It remains to be discussed whether the compensation bonus should only apply to the self-employed who are the citizens of the EU, EEA and Switzerland.
The maximum compensation bonus amount remains at CZK 500 per one calendar day of the bonus period (from 12 March to 30 April 2020), i.e. CZK 25,000 in aggregate.
The compensation bonus will be considered income decisive for determining the entitlement to allowances paid pursuant to the Act on Assistance in Material Need and the Act on State Social Support.
Self-employed planning to draw the compensation bonus will not be entitled to unemployment benefits for any calendar day in which they receive the compensation bonus. Self-employed receiving unemployment benefits during the bonus period will not be entitled to the compensation bonus for the calendar days in which they receive unemployment benefits.
Applications for the compensation bonus must be submitted within 60 days of the end of the bonus period. If the application is not filed within this deadline, the self-employed’s entitlement to the compensation bonus extinguishes.
If, after carrying out procedures to remove doubt or a tax inspection, the tax administrator determines that conditions for the entitlement to a compensation bonus were not met or that the compensation bonus was assessed incorrectly, the tax administrator will assess additional tax equalling the difference between the amount originally assessed and the new amount. However, the duty to pay a penalty on the assessed tax amount will not arise.