The 11th Act of the Year: Regulation in the Digital World

The Act of the Year is a joint project of firms, associations and other entities engaged in the quality of Czech business regulation. As part of the Act of the Year, we discuss various topics from the area of business regulation. Traditionally, the project includes a survey in which we announce the most inspiring examples of business regulation in the previous year. Hundreds of businessmen take part in the survey ever year. The Act of the Year is organised by Deloitte Legal together with partners from the business and legal community. By organising the project, we actively encourage social debate regarding basic required areas and forms of regulation in the Czech Republic.

Nominations in the Act of the Year 2019 survey

Digital state: Data circulate, people don’t (Act on the Right to Digital Services)
Regulation Act No. 12/2020 Coll., on the Rights to Digital Services and Amendments to Certain Acts (full text)
Author Proposal of deputies Barbora Kořanová, Martin Kupka, Ivan Bartoš, Pavel Jelínek, Pavel Kováčik, Jan Chvojka, Jan Bartošek, Helena Langšádlová, Věra Kovářová and others
Reasons The act establishes the general right to communicate digitally with the state and the state’s obligation to address matters digitally. It creates a legal framework which should enable the digitalisation of all public administration services, issuance of the necessary electronic forms and interconnection of registers within five years so that people no longer have to carry documents from one office to another. The agreement on the adoption of the act across the political spectrum brings the promise of actual implementation in practice. The implementation will require an efficient decrease in administrative demands placed on businesses, and data security in the interconnected state registers.

The state may impose obligations only through a legal regulation (cancellation of the practice of obligatory tax forms informally set by the ministry)
Regulation Judgment of the Constitutional Court dated 12 November 2019, ref. no. Pl. ÚS 19/17 (No. 337/2019 Coll.) regarding the proposal to cancel Section 72 (1) of Act No. 280/2009 Coll., the Tax Code, as amended by Act No. 458/2011 Coll. (full text)
Author Constitutional Court, based on a proposal of a group of 19 senators
Reasons Although the ruling concerns tax law, there is a significant overlap in other areas – it generally strengthens the principle of legal certainty as an integral feature of the rule of law. The primary message is the reminder that the state can require the fulfilment of an obligation only based on a legal regulation. Only then can the law and the procedures of public authorities be predictable, substantially fulfillable and subject to constitutional control. In this respect, the Constitutional Court is consistent with its previous similar judgments regarding local sales/purchases reports and electronic sales records, and together with the expert public, it assumes the long-term opinion that higher tax collection efficiency cannot be at the cost of erosion of the rule of law.

Decrease in the costs of business (online incorporation of companies)
Regulation Directive (EU) 2019/1151 of the European Parliament and of the Council of 20 June 2019 amending Directive (EU) 2017/1132 as regards the use of digital tools and processes in company law (full text)
Author European Commission
Reasons Starting from 1 August 2021, all Member States are to allow online formation of limited liability companies and potentially also joint-stock companies and to allow online registrations of branches and filing of documents and information in business registers. Online procedures have to allow incorporation without the physical presence of individuals and they may not be subject to the condition of obtaining a business permit. This measure is intended to decrease the costs of business operation.

Higher predictability and better clarity of legal acts (common commencement dates and overviews of obligations)
Regulation Act No. 277/2019 Coll., which Amends Certain Acts in Relation to the Adoption of the Act on the Collection of Laws and International Treaties (full text)
Author Amendment proposed by deputies Marek Benda and Martin Kupka and amendment proposed by deputies Marek Benda, Jakub Michálek, Zuzana Ožanová and Věra Procházková regarding the government bill
Reasons Legal regulations will be from now on coming into effect only twice per year, from 1 January or 1 July. Each regulation will now also contain an informative overview of the obligations introduced. These new elements could significantly increase user comfort of businesses as well as all other addressees of legal regulations. They will also strengthen the predictability of regulatory changes and simplify the operation of information systems providing businesses with clear lists of their regulatory obligations.

The state cannot collect a special fee for fulfilling its obligations (cancellation of the fee for filing a motion for the investigation of a public tender)
Regulation Judgment of the Constitutional Court dated 30 October 2019, file no. Pl. ÚS 7/19 (No. 309/2019 Coll.), cancelling the provisions of Section 259 of Act No. 134/2016 Coll., on Public Procurement, as amended (full text)
Author Constitutional Court, following the proposal of Transparency International – Česká republika, o. p. s.
Reasons A healthy business environment includes competition in public procurement. Its fairness is supervised by the Office for the Protection of Competition. The Office fulfils this duty with the help of motions pointing out possible errors. However, until November 2019 the filing of a motion and its investigation was subject to the payment of a fee of CZK 10,000. The cancellation of the fee eliminated a precedent where putting a motion before an authority competent to perform supervisory activities incurred a fee; in this case a motion before the Office for the Protection of Competition in the area of level playing field of businesses.

Organizátor Pod záštitou