News in brief, May 2020

DOMESTIC NEWS IN BRIEF

• An amendment to the Civil Code, published under No. 163/2020 in the Collection of Laws, introduces the simplification and specification of certain rules applicable to associations of residential unit owners.
• An amendment to the Decree on Applications under the Act on Investment Companies and Investment Funds (no. 201/2020) has been published in the Collection of Laws, reflecting changes in the Act on Investment Companies and Investment Funds and effective from 1 May 2020.
• The financial administration draws attention to deficiencies in applications for compensation bonuses in the event of the concurrence of business activities and employment; self-employed who are at the same time employees cannot usually apply for the compensation bonus.
• In connection with the coronavirus pandemic, the GFD has published a summary of options to exempt imports of goods from third countries from customs and VAT.
• The Confederation of Industry and Transport of the Czech Republic has published guidance titled Tax Implications of Electromobility.
• From May, the Ministry of Justice has resumed in-person super-legalisation, i.e. the possibility to have deeds intended to be used abroad and issued by Czech bodies verified personally, but for safety reasons only to a limited extent so far. The in-person verification of deeds will only be possible after making an online reservation. It is still possible to apply for the verification of deeds by post.
• The government has approved the postponement of all waves of the electronic reporting of sales until the end of 2020. All entities falling into the first two waves, i.e. wholesale, retail, meal services and accommodation, as well as entities that were supposed to start reporting their sales electronically on 1 May 2020 will only commence reporting their sales electronically from 1 January 2021. An amendment to the relevant act will be discussed by the chamber of deputies under the legislative emergency regime.
• The government has approved the provision of support for commercial real estate leases amounting to 50% of the rent if 30% of the rent is borne by the lessor. Lessees will thus have to pay 20% of the rent. This support will apply to rent for the period from 1 April to 30 June 2020. Documentation that will have to be attached to an application will have to include at least a lease contract, an amendment to the lease contract committing the lessor to provide a 30% discount, and a document supporting the rent charged for the months preceding the coronavirus outbreak. The support programme should only apply to entities unable to perform their business activities due to the pandemic and will be prepared by the Ministry of Industry and Trade.
• The government has approved an increase in carer’s allowances for the self-employed from CZK 424 to CZK 500 per each calendar day for the period from 1 April to 30 June 2020. The programme will be announced by the Ministry of Industry and Trade this week.

FOREIGN NEWS IN BRIEF 

• The OECD announced that multilateral efforts to address the tax challenges arising from the digitalisation of the economy shall continue according to the announced timeline (for further details please refer to Euro Tax Flash issue 423). Working methods have been adapted following various Covid-19 measures, and all participants continue working towards reaching a political decisions on the key components of a multilateral solutions at the G20/OECD Inclusive Framework on BEPS meeting scheduled for the beginning of July 2020.
• In April, the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent BEPS (MLI) became effective for Liechtenstein and Qatar. At the end of March, the MLI was ratified by Oman. The total number of signatories to the MLI currently stands at 94 jurisdictions. In total, 44 jurisdictions have deposited their instruments of ratification with the OECD. The MLI has entered into force in 39 jurisdictions. The OECD has provided a full list of the signatories and parties to the MLI as of 11 March 2020 here.
• The OECD Forum on Tax Administration (FTA) has published a global reference document summarising measures to support taxpayers taken by FTA tax administrations in connection with the COVID 19 pandemic. The supporting measures help taxpayers to address cash-flow concerns as well as difficulties in meeting reporting and payment deadlines. The document will be updated on a regular basis to assist tax administrations in the development of appropriate supporting measures in their jurisdictions.
• An overview of tax developments being reported globally by KPMG member firms in response to COVID-19 is available here. For further insight into the potential tax, legal and mobility implications of COVID-19, please refer to the dedicated KPMG web page. In addition, KPMG Global is hosting a regular webcast series – Keeping Connected Globally Series – Global Perspectives on the Future of Tax, Legal and Mobility.
• The European Commission approved the Czech regime of Covid Plus guarantees of EUR 5.2 billion for loans provided to large export enterprises affected by the coronavirus outbreak. Entities interested in this type of support should commence negotiations with banks as soon as possible, as the programme is likely to be launched soon and will draw much interest. EGAP has also published a guidance for banks how they should proceed. The programme is expected to open in the upcoming days.