COVID – Gastro Program for Closed Facilities has been approved

The new COVID – Gastro Program for Closed Facilities, a scheme prepared by the Ministry of Industry and Trade, was approved on 4 January 2021 by the Czech government.

The program is designed to mitigate the adverse impacts of the restrictions introduced to combat the COVID 19 pandemic, specifically to mitigate the adverse impacts on entrepreneurs in the Czech Republic and to provide financial support to those entrepreneurs that had direct restrictions imposed on their business activities on the basis of the crisis-related measures introduced by the government and that consequently suffered a decline in revenues and liquidity.

Under the terms of the 1st Request for Applications that is currently being prepared for support under this program, the support will be provided in respect of the period from 14 October 2020 to 10 January 2021. 

Applications may be submitted starting from 15 January 2021.

Subsidies are being provided for operating costs and for the cost of maintaining business activities, such costs being, for example, personnel costs, cost of material, services (including, for example, leasing costs), depreciation, taxes and fees, loan installments, overhead costs and so forth.

Eligible applicants are applicants that fulfill the following conditions:

a) an individual (an entrepreneur), that, as at the submission date of the application, is a

1. tax resident of the Czech Republic, or
2. is not a tax resident of the Czech Republic but anticipates that they will be able to meet all of the conditions to qualify for a reduction of tax in respect of the 2020 tax year pursuant to § 35ba (2) of Act No. 586/1992 Sb., on Income Tax, or is a business corporation that, as at the submission date of the application, is a
3. tax resident of the Czech Republic, or
4. 4. is a tax resident of another EU member state or a member state of the European Economic Area and has not generated the majority of its revenues for the relevant period from sources in the Czech Republic

b) is conducting business on the basis of Act No. 455/1991 Sb., on Conducting Business in Trades, in the objects of business described under CZ-NACE 45 and 47 (retail), 49 (transportation of persons by funicular or ski tow) 56 (food services), 59 (film projection), 64 to 93 (selected activities, including sports, entertainment and recreational activities) or 96 (personal services such as hairdresser and make-up services etc.).

The maximum amount of support for a single beneficiary of support is specified as the product of 400 CZK times the number of employees expressed as full-timeequivalent employees (FTE) and/or persons working for the entrepreneur as selfemployed contractors, times the number of recognized days during which the conduct of business activities was restricted.

For example, if a subsidy is applied for by a retail chain with 5 stores, each store having 10 full-time employees, the retail chain operator will obtain 20 thousand CZK per day for all stores, i.e. a total of 600 thousand crowns per month. For the entire period of the closure – i.e. 58 days – this works out to a total of 1 160 thousand crowns.

Employees in sectors in respect of which support was already provided under the programs called COVID – Culture, COVID – Accommodation and COVID – Sport are not supposed to be included in the calculation (i.e. they should be left out of the calculation). It is permissible to draw the financial support under this program while at the same time continuing to draw support under the ANTIVIRUS program.

For the sake of completeness, it should be pointed out that the basic support programs for entrepreneurs that are not targeted at specific sectors and that were introduced in connection with the coronavirus pandemic are currently the following:

• ANTIVIRUS
• KOMPENZATORY BONUS FROM THE MINISTRY OF FINANCE

Additionally, the following program remains in effect:

• COVID – LEASES - Request for Applications 2, which will close on 21 January 2021, but the next program in this area, COVID – LEASES Request for Applications 3, is presently being prepared for launch

We would be pleased to assist you with obtaining support under the program called COVID - Gastro – Closed Facilities.

If you are interested in applying for support under this new program, Rödl & Partner Optimus can help you with the submission of the application, advise you how to calculate the full-time-equivalent employees and also assist you with the correct classification of your business activity under CZ NACE.

We can also assist you with assessing whether your firm meets the condition that it is not in economic difficulty (economic dire straits).

Our experts can also review the state aid you have drawn up to this point and compare it with the limit stipulated in paragraph 3.1 of the Temporary Framework of the European Commission for a single beneficiary of aid (an undertaking).