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Who is entitled to the new compensation bonus?
At the end of February 2021, the legislation on the compensatory bonus for the year 2021 came into force. From February 2021 onwards, self-employed persons, partners of small Ltd. companies (s.r.o.), and some employees on “work-agreements” may ask for compensatory bonus under the new regime. Some employees that were not entitled to claim the compensation bonus under the old regime may now be entitled, and on the other hand, some employees who earlier entitled to a compensation bonus may no longer be entitled to it.
The new compensation bonus is based on the decrease in income for a certain period, i.e., the comparison period. Under the new law, entrepreneurs need not prove that they are doing business in activities or sectors directly prohibited or restricted by crisis measures, or that their business is connected to these activities. In the future, it should not be the case that tax officials inform entrepreneurs that their activities have not been banned and it is only that their customers have not been able to enjoy their services, as has been the case with some guides, travel agencies, and tour operators. As lawyers, we welcome this approach. Indeed, in relation to the old compensatory bonus, there was often no choice other than to oppose the rejection decisions of tax offices by bringing an action before court.
Entrepreneurs must now prove a 50% or higher decrease in income during the comparison period. The comparison period can be chosen by the entrepreneurs and should be done after careful consideration to ensure that the difference in income is actually at least slightly more than 50%. Increase of the compensation bonus from CZK 500 CZK to 1,000 CZK per day is also a positive step. Further, entrepreneurs can receive a compensation bonus for February 2021 even if they had previously applied for the old compensation bonus for the same period.
However, many shortcomings from the last compensation bonus regulations remain. For instance, compensation bonus still cannot be claimed in parallel with other programs, except the “Antivirus” program. Therefore, self-employed persons wanting to claim benefits under other programs, such as the upcoming “Covid - uncovered costs”, will not be permitted to do so. However, this regulation does not apply to Ltd. companies as they are not the recipients of the compensation bonus – it is their partners. Therefore, Ltd. companies will be entitled to claim bonuses on other programs.
As the new compensation bonus regulations bring many questions, we have.
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Stewarts
'No one has done as much for me as you,' Eva said.
Stewarts
"A visit to her daughter in London turned Eva's life upside down when she says she stepped into a crossing on a green light but was hit by a car. Despite her remarkable bravery, she faced a long treatment due to fractures in her pelvis, and the associated limitations and pain are likely to persist for the rest of her life. Regular headaches and impaired concentration compound her challenges.
Eva contacted us through an organization temporarily helping her manage her difficult living situation. At that time, she was destitute, relying only on subsistence payments. We were able to assist her because we specialize in personal injury and have contacts with proven colleagues abroad.
We worked with Stewarts, a UK law firm, on this case. Attorneys Klára Dvořáková and Rebecca Huxford helped Eva with the documentation in her case, explaining her options and the differences between the Czech and British systems of healthcare and social benefits reimbursement. Within a few months, thanks to the professional cooperation between the two offices, an offer of compensation from the insurance company of approximately CZK seven million was achieved. The client accepted this settlement because she did not want to deal with courts in the United Kingdom.
Subsequently, we assisted the client with related tax issues and contacted Auditone, a tax consultancy firm, which arranged for the filing of a tax return. Compensation for lost income is taxable, unlike most personal injury compensation.
'No one has done as much for me as you,' Eva said.
The fact that we were able to help Eva gives our work meaning and brings us great joy. We are very happy that, thanks to our many years of active involvement in the international professional organization PEOPIL, we can cooperate on such cases."
Livingstone, Tour Operator
Thank you again for your valuable advice. I breathe better when I know who to turn to.
Livingstone, Tour Operator
"Thank you again for your valuable advice. I breathe better when I know who to turn to."
Anders Thorsen Advokatanpartsselskab
It has been an absolute pleasure to work with you.
Anders Thorsen Advokatanpartsselskab
"It has been an absolute pleasure to work with you and your colleagues. Your advice and way of handling the matter and our communication has been of the highest quality and we are very happy with the outcome.
If any of my clients need assistance in matters in the Czech Republic in the future, I know who to recommend."