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An Overview of Important Legislative Changes in the Czech Republic

An Overview of Important Legislative Changes in the Czech Republic

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An overview of important legislative changes in the Czech Republic.

Inadmissible agreement on unpaid leave

The Supreme Court ruled that if an employer is unable to assign work to an employee due to an obstacle on its side (e.g. restrictions during a pandemic), it must proceed according to the Labour Code and pay wage compensation. It is not permissible to conclude an agreement on unpaid leave instead.

New methodological instruction of the GFD

The General Financial Directorate has issued a new methodological instruction No. GFŘ-D-59, regarding the practical application of the Income Tax Act, e.g. on the exemption of income from the sale of immovable property and related changes to terms or specification of conditions for applying the lump sum meal allowance.

Right to appointment of a legal representative extended

The Constitutional Court repealed part of the Advocacy Act regarding the appointment of a legal representative for those without the means to pay for one. The Czech Bar Association should newly appoint a legal representative even for those who can afford one but cannot find anyone willing to take on their case. The enforceability of the decision has been postponed until 31 December 2023.

Bill to regulate the cannabis market

A bill is being prepared to regulate the cannabis market, which should enable self-cultivation and the establishment of cannabis clubs. The law should further establish a model of licensed manufacturers, distributors and dealers. The bill is expected to be submitted by the end of March 2023.

Agreement on set-off before commencement of insolvency proceedings (NS 29 ICdo 127/2020)

An agreement by which the debtor and the creditor set off their mutual claims against the debtor's assets before the commencement of insolvency proceedings is not in itself a legal action without adequate compensation and, as a rule, it will not even be an ineffective legal action within the meaning of the Insolvency Act.

Exclusion of internet sales of goods as sales under the Sales Period Act (7 As 229/2020)

In the case of goods purchased in an online store, their mere issue (or payment) in the establishment cannot be regarded as a retail sale within the meaning of the Retail Sales Period Act, as the decisive phase of the sale (conclusion of the contract) did not take place in the establishment but on the website.

By Ondrej Benes, Counsel, Jiri Brabec, Associate, Barbora Bugováa, Associate, Tomas Jelinek, Senior Associate, and Petra Konecna, Counsel, Eversheds Sutherland

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