News on legislation in Czech Republic in 2020
At the end of this year, there is not that many legislative news in the Czech Republic, which would be generally relevant for all entrepreneurs, as usual. All changes made in the last quarter of this year concern rather specific areas of law, such as timber industry (amendment of the Czech Forest Act responding especially to bark beetle calamity), real estate agencies and real estate brokers (the New Czech Real Estate Brokerage Act, which should come into effect on January 1, 2020 and which shall impose restrictions on the provision of escrow of purchase price, real estate brokerage as a professional trade and other obligations, buts its effectiveness will be spostponed as it was not yet confirmd by the Czech president), expertise and experts (new Czech Act on Experts, Expert Offices and Expert Institutes, which will be effective on 1.1.2021), or explicit regulation of the European Public Prosecutor's Office, which should persecute more effectively the frauds within the European Union, and will have the powers to investigate and prosecute crimes affecting or threatening the European Union budget, such as frauds, corruption, money laundering and cross-border VAT frauds.
From the January 1, 2020, there is a newly introduced residence fee in Czech Republic, which responds to digital platforms such as Airbnb and others, where the providers were so far favoured, as they were not a subject to any spa, recreational or accommodation fee. Another general change effective from November 1, 2019, according to which the first acquisition of a finished or used unit in a single-family house is not a subject to the real-estate acquisition tax, provided that such unit does not include a commercial space other than a garage, cellar or storage room used together with the unit, which were created by extension, reconstruction or superstructure of such unit unless it is merely a division or merger of existing units, or provided that such unit does not include a commercial space other than a garage, cellar or storage room used together with the unit, resulting from the reconstruction of the commercial space. The acquisition of ownership of the unit must take place within 5 years from the date of completion, or commencement of use of the unit (or unit altered by the construction works), depending on which date occurs earlier.
A general description of any changes, which are currently in state of a legislative process, can be very tricky, as many of those changes will never pass through the legislative process. A lot of articles have been written about the expected major amendments to the Czech Labour Code, but to this day, none such amendment has been adopted. The new amendment to the Czech Business Corporations Act, which has been discussed in the Czech Chamber of Deputies since June 2018, is probably the closes to pass through the Czech legislative process in the near future. This amendment would mean some major changes with effect from the January 1, 2021, which we summarized in our article The Significant Amendment to the Czech Business Corporations Act.
The less the legislation news was made in 2019, the more interesting court decisions were published. Many areas of law have been interpreted more precisely by higher Czech courts, and entrepreneurs now have greater certainty in the exercise of many of their rights and obligations. We wrote about the new case law confirming the correct process of the dividend payments in the article Conditions for the Distribution of Profit in Czech Republic. In our latest article The Most Important News from the Case Law in Czech Republic in 2019, you can find out many other news, which were brought by the case law of Czech courts and Czech Office for Personal Data Protection in the year 2019.
For the business corporations in Czech Republic, all the warnings and recommendations, that we wrote about at the end of last year in our article The Top 10 things that every owner of a Czech company should check before the year end, are still in place. The risk of liquidation of Czech business corporation ordered by the court remains very high, and in addition, the Czech Supreme Court ruled in 2017, that the enforceable decision of such liquidation, can no longer be cancelled in any way.
The Czech regulation changing the rate of the basic reimbursement for the use of road motor vehicles and meal allowances in Czech Republic in 2020
The regulation changing the rate of the basic reimbursement for the use of road motor vehicles and meal allowances and setting out the average price of fuels for the purpose of providing reimbursement of travel costs in 2020 was published in the Czech Collection of Laws on 31 December 2019.
Rate of the basic reimbursement for the use of road motor vehicles in Czech Republic in 2020
Pursuant to section 157(4) of the Labour Code, the minimum rate of the basic reimbursement for 1 km of journey remained the same and amounts to
a) CZK 1.10 for single-track vehicles and three-wheelers;
b) CZK 4.10 for passenger road motor vehicles.
Meal allowances in Czech Republic in 2020
Pursuant to section 163(1) of the Labour Code, an employee is entitled to minimum food allowances for each calendar day on a business trip, whereby this amount was increased in 2020 compared to 2019 and amounts to
a) CZK 87 if the business trip is 5-12 hours long,
b) CZK 131 if the business trip is longer than 12 hours, but for the maximum of 18 hours,
c) CZK 206 if the business trip is longer than 18 hours.
Pursuant to section 176(1) of the Labour Code, an employee is entitled to minimum food allowances for each calendar day on a business trip, whereby this amount was increased in 2020 compared to 2019 and amounts to
a) CZK 87-103 if the business trip is 5-12 hours long,
b) CZK 131-158 if the business trip is longer than 12 hours, but for the maximum of 18 hours,
c) CZK 206-246 if the business trip is longer than 18 hours.
Average price of fuels in 2020 in Czech Republic
Pursuant to section 158(3), third sentence, of the Labour Code, the average price of 1 litre of fuels in 2020 was decreased in 2020 compared to the year 2019 and amount to
a) CZK 32 of 95 octane petrol,
b) CZK 36 of 98 octane petrol,
c) CZK 31.80 of diesel oil.
d) CZK 4.80 for 1 kilowatt hour of electricity.
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