COVID RENT PROGRAM

20. 五月 2020

The Government of the Czech Republic approved the COVID Rent Program on 18 May 2020. The program is intended to provide support to businesses and entrepreneurs that were prohibited from selling goods and services in rented premises for at least a part of the period from 13 March 2020 to 30 June 2020. We provide a brief summary of the program's conditions and requirements below.

Requirements:

  • The applicant must be a natural person or legal entity that carries out a business activity.
  • The applicant must be using business premises on the basis of a valid lease or sublease agreement concluded before 12 March 2020 and, at the same time, cannot be a related person (in Czech: spřízněná osoba) of the relevant lessor. The program does not apply to usufructuary leases.
  • The prohibition of the sale of goods and services in the relevant premises applied to the applicant.
  • The applicant is not in default with payments to selected institutions and authorities (in particular the financial authority, the Czech Social Security Administration, and health insurance companies).
  • The applicant has concluded an agreement with the lessor on a 30% discount on rent for the months of April, May and June 2020 (provided the lessor is not the state).
  • The applicant paid 50% (or 80% if the lessor is the state) of monthly rent for the months of April, May and June 2020 in accordance with the relevant lease agreement (or alternatively under the COVID‑related payment deferral permitted by law) and 70% of VAT from the original amount of monthly rent.

Support provided:

  • The support covers 50% of monthly base rent (variable rent components are disregarded), which may not (for the purposes of the program) be higher than the rent for January and February 2020 (any increase would be disregarded).
  • VAT is not covered by the program; the amount of support is calculated on the basis of rent excluding VAT.
  • In cases where the leased premises are owned by the state, support amounts to 80% as the state does not provide discounts on rent.
  • Support is provided solely for the months of April, May and June 2020 (provided the lease was ongoing).
  • The maximum amount of support is CZK 10 million per recipient.

Application:

  • The application may be filed electronically (once the relevant announcement of the Ministry of Industry and Trade is made).
  • Only one application is to be filed per premise, unless there are more lessees operating in such premises.
  • The application must include:
    • Affidavit of the applicant
    • Affidavit of the lessor
    • Document evidencing the payment of rent for January and February 2020
    • Document evidencing the payment of 50% of rent for April, May or June 2020
    • Signed proposal of an agreement settling the applicant's claims for damages towards the state (this will probably be prepared by the subsidy provider).
    • Document evidencing the payment of VAT with respect to rent, which is to be subsidised.

Basic templates of the relevant documents will be made available at www.vzornepravo.cz for free in the next few days.

Should you require further information regarding the program outlined above and its application to your specific situation and relationships, do not hesitate to contact us.

The information contained in this brochure does not constitute legal advice. PRK Partners and individuals involved in the preparation of this brochure are not responsible for the consequences of actions taken based on the information contained herein, which may not be accurate or comprehensive to a particular situation.You can also send any questions to our designated email address covid@prkpartners.com