Czech Republic Changes in Insurance, UBO, and Reporting Policies
Higher Income Base Requirements for Health Insurance
The Czech Republic has introduced several changes in insurance, UBO, and reporting policies for the year of 2021. As of January 1st, 2021, the income base amount for health insurance contributions has been raised by CZK 500. The threshold for health insurance participation which had been previously set at CZK 3,000 is now at CZK 3,500.
Employers must assess the employees who participated in health insurance contribution plans in the previous year, and remove those with income falling below the new prescribed threshold of CZK 3,500.
The New UBO Act
Parliament of the Czech Republic has passed a new measure pertaining to Ultimate Beneficial Owners (UBO), which will be set into place beginning June 1st, 2021. The measure incorporates significant revisions to both UBOs and the Register.
The new UBO Act sets fourth the following changes:
- UBO will now be defined as any individual who acquires an ultimate benefit from, or employs any ultimate influence over a legal establishment
- The common public will have access to data of the UBO
- Non- compliance instances may be punishable by a fine of up to CZK 500,000, per instance
- The legal establishment must mandate and monitor the following:
- The UBO must be registered in order for profits to be distributed
- Shareholders must not collect any profit if the UBO is not registered
- Any non-registered UBO is prohibited from participating in voting at meetings as a shareholder
- Any shareholder that has a non-registered UBO(s) is prohibited from participating in voting at meetings as a shareholder
Businesses with registered UBOs must revisit their registrations and amend them to comply with the regulations of the new UBO Act by November 2021. Businesses must also ensure that any of their UBOs that register after June 1st, 2021, comply with the new UBO Act’s provisions promptly.
Employment Act Amendment Deems New Reporting Obligations
A new revision to the Employment Act has been presented by Czech’s Chamber of Deputies, altering the reporting process of employers.
The following reports must be filed to authorities by all employers in the Czech Republic:
- As of March 1st, 2021, vacancy reports must be filed with the Ministry of Labor and Social Affairs within a 10-day window from when the post was created, vacated, or filed
- Beginning August 1st, 2021, employers must electronically submit information on employees choosing not to participate in health insurance and information on modification and terminations of employees with the District Social Security Administration within 8 days
- Beginning August 1st, 2021, employers must electronically apply for registration of new employees or employee status changes within 8 days of the employee’s start date or the change effective date. The application must be e-filed with the District Social Security Administration
Employers must comply with these new regulations and report the required information on employment vacancies and terminations, etc., within the specified time frames. Non-compliance will result in punitive judicial actions.
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