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COVID Program - RENT Before Starting (UPDATE 02) 

by Pavel Dejl, Petr Kasik, Helena Navratilova, Petra Mirovska, Jan Cernohouz, Martin Stefko

Published: June, 2020

Submission: July, 2020

 



The state contribution for commercial leases to entrepreneurs with forcibly closed establishments will be launched on June 26, 2020 at 9 AM. If the entrepreneur has negotiated a 30% discount on the rent from his landlord, he will be able to apply for state support in the amount of 50% up to a ceiling of CZK 10 million for the period from April to June.


The government released an amount of up to CZK 5 billion for the "Program for the Support of Entrepreneurs Affected by the Global Spread of the COVID-19 Disease Caused by the SARS-CoV-19 COVID - RENT " ( Program ) and entrusted its implementation to the Ministry of Industry and Trade ( MIT ).


The Ministry of Industry and Trade published specific conditions on 19 June 2020 and will accept electronic applications for support from 9:00 on 26 June 2020. Authentication of applicants will take place through the so-called NIA - electronic identity .


The condition of the state rent contribution is an  agreement between the tenant and the commercial landlord on a rent discount of at least 30% of the total rent for the entire so-called decisive period, which is the period from 1 April 2020 to 30 June 2020 . If the landlord is the state, the discount will be provided automatically and if the discount cannot be provided, support of 80% of the discount will be provided. The amount of rent from which the discount will be provided will have to be substantiated by proof of payment of rent for the previous period, in order to avoid a purposeful increase in rent. Only a fixed amount of rent, ie not eg turnover rent, is eligible for support. At the same time, it must pay her the rent, which is applied on the basis of a lease concluded before 13 March 2020.


The program is targeted at small and medium-sized businesses and is capped at CZK 10 million per applicant over a three-month period. Entrepreneurs operating retail and service establishments, which had to be closed as a result of a declared state of emergency, will be able to apply for support  They will be able to draw support even if they operated  in a limited mode , eg within the sale through the dispensing window, delivery service or e-shop. However, support will  not be available to entrepreneurs who are related to the landlord , whether it is a subsidiary or sister company, but also the connection through the landlord's share in the tenant or the statutory bodies of both entities.


The state contribution will be paid retrospectively, ie the entrepreneur must prove payment of 50% of the rent for the supported three months and payment of VAT (if applied to the rent) of 70% of the rent for the period, and only then can apply for the state contribution.


 


 



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