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Reduction of penalties for unpaid health and social insurance in the Czech Republic from 1 January 2022 | News Flash

September 30, 2021
This article is also available in
Czech

The amendment to the Czech Code of Civil Procedure and the Code of Execution brings a reduction of the penalty for unpaid health and social insurance premiums from 1 January 2022.

On 30 July 2021, the Collection of Laws No. 286/2021 Coll. published an act amending Act No. 592/1992 Coll., on public health insurance premiums, and Act No. 589/1992 Coll., on social security premiums.

Until now, interest on arrears in the payment of health insurance and social security premiums was 0.05% for each day of delay and thus 18.25% per year. From 1 January 2022, this will be reduced.

The taxpayer will be sanctioned with statutory interest, which is 8% plus the repo rate set by the Czech National Bank (further „CNB“) for the first day of the calendar half-year in which the taxpayer began to owe. As in case of the interest on tax arrears, the amount of interest is newly derived from the Civil Code.

If the penalty was incurred before 1 January 2022, the interest remains at 0.05% per day.

Example: calculation of interest on arrears

The taxpayer owes CZK 10,000 on premiums from July 2020. The penalty for 2021 is CZK 5 per day (0.05% of CZK 10,000), i.e. a total of CZK 1,825. However, interest on arrears for 2022 will be only CZK 825 (8% + 0.25%).

This amendment unifies the calculation of interest on arrears in the payment of premiums with the calculation of interest on arrears of the payment of taxes.The calculation of interest on tax arrears was revised by a recent amendment to the Tax Code – from 1 January 2021, it arises from the 4th day following the original tax due date to the date of its payment. This is also derived from the Civil Code and it also corresponds annually to the repo rate set by the CNB for the first day of the calendar half-year in which the delay occurred, increased (since 2021) by 8 percentage points (previously 14 points).

Development of the CNB repo rate

Valid from:

%

3.5.2019 2,00
7.2.2020 2,25
17.3.2020 1,75
27.3.2020 1,00
11.5.2020 0,25
24.6.2021 0,50
6.8.2021 0,75
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