Government Decree No. 69 / 2005 Coll.
Government regulation on the conditions for granting subsidies in connection with the early cessation of farming activities by an agricultural entrepreneur
Valid
Effective from 07.03.2005
69
GOVERNMENT REGULATION
of 26 January 2005
laying down the conditions for granting a subsidy in connection with the early cessation of the agricultural activity of an agricultural operator
According to Article 2c (5) of Act No. 252 / 1997 Coll., on Agriculture, as amended by Act No. 85 / 2004 Coll., (hereinafter referred to as "the Act '), the Government mandates the implementation of Section 2c (2) (e) of the Act and the implementation of Part One of Act No. 256 / 2000 Coll., on the State Agricultural Intervention Fund and on the amendment of certain other laws (Act on the State Agricultural Intervention Fund), as amended by Act No. 128 / 2003 Coll., Act No. 85 / 2004 Coll. and Act No. 482 / 2004 Coll.:
Subject matter
This Regulation (1) provides for the granting of subsidies under the programme to promote the early cessation of agricultural activity of an agricultural entrepreneur (hereinafter referred to as the "programme ') following the directly applicable regulation of the European Community2.
Definition of terms
For the purposes of this Regulation:
(a) the holding has an undertaking under special legislation (3) intended for the operation of agricultural production under Section 2e (3) of the Act;
(b) by the operation of agricultural production, the activity defined in Section 2e (3) of the Act, carried out by a person who is an agricultural entrepreneur pursuant to Section 2f of the Act or, where appropriate, by a person under special legislation (4), as well as by participation in the operation of agricultural production as an employee of the holding and, if applicable, by an agricultural holding which is a legal person, also as a statutory authority or a member of its statutory authority.
Application for inclusion in the programme
(1) An application for inclusion in a programme (hereinafter referred to as "application for inclusion") may be submitted by a natural person (hereinafter referred to as "applicant") if:
(a) is an agricultural entrepreneur under § 2e of the Act registered under § 2f of the Act or a person holding a certificate under special legislation4),
(b) at the date of the application for inclusion is at least 55 years of age and on the date of the application for inclusion is below the age required for entitlement to an old-age pension (5);
(c) for a period of at least 10 calendar years immediately preceding the year in which the application for inclusion is submitted, has carried out agricultural production in accordance with Article 2e (3) of the Act, of which at least the last 3 calendar years in its own name and under its own responsibility on the holding being transferred, reaching an area of at least 5 hectares of agricultural land; and
(d) demonstrate that, in each of the three calendar years immediately preceding the calendar year in which the application for inclusion is made, the proportion of its income from agricultural production in accordance with Section 2e (3) of the Act has reached at least 50% of its total business income.
(2) The application for inclusion shall be submitted by the applicant to the State Agricultural Intervention Fund (hereinafter referred to as the Fund) using the form issued by the Fund, no later than 31 December 2006.
(3) The application for inclusion contains:
(a) the formalities laid down in Article 3 (2) of the Act;
(b) a list of all soil blocks or parts of soil blocks kept in the register of use of agricultural land in accordance with the user relations provided for in Article 3a of the Act (hereinafter referred to as the "Soil Register"), by the applicant for agricultural management on the date of application for inclusion,
(c) identification data of a natural or legal person who fulfils the conditions set out in Paragraph 4 (hereinafter referred to as the "acquirer") (name, name, surname, date of birth, identification number, if assigned, address of place of permanent residence or place of business, if any, in the case of a natural person, or business name, registered office, identification number, subject of business, if applicable, in the case of a legal person),
(d) indicators relating to indebtedness, post-tax profit and net annual income (hereinafter referred to as "economic indicators") of the farmer of the holding during the last 5 calendar years immediately preceding the calendar year in which the application for inclusion was submitted; the transferee who has not been an entrepreneur throughout the last 5 calendar years immediately preceding the year in which the application for inclusion was submitted does not submit that information,
(e) projected economic indicators based on business plans of the transferee's holding for a period of five calendar years following the calendar year in which the application for inclusion is submitted;
(f) an overview of the income from the agricultural activity and the total income of the applicant from the business in the last 3 years immediately preceding the calendar year in which the application for inclusion is submitted;
(g) the affidavit of the applicant;
1. undertake not later than 12 months from the date of receipt of the application for inclusion to cease farming business and transfer the holding to the transferee,
2. which undertake to request the Ministry of Agriculture to exempt its person from the land register;
3. that it does not reach the age required for entitlement to an old-age pension (5).
(4) An integral part of the application for inclusion is:
(a) an extract from the business register, certificate or business registration document pursuant to special legislation (4) of both the applicant and the transferee, not more than 3 months old;
(b) a copy of the accounting records or tax documents (if applicable) showing the results of the economic characteristics of the transferee's holding for the five calendar years immediately preceding the year in which the application for inclusion is made; the transferee who has not been an entrepreneur for the entire duration of the five calendar years immediately preceding the year in which the application for inclusion is made does not submit such documents;
(c) a copy of the accounting records and, where applicable, tax documents (6) of the applicant showing the proportion of the income from the agricultural activity in the total income of the applicant from the business for the three calendar years immediately preceding the year in which the application for inclusion is submitted;
(d) proof of the operation of agricultural production referred to in paragraph 1 (c);
(e) a document proving the professional competence of the acquirer under Article 4 (b) and (c);
(f) an affidavit by the transferee who undertakes to farm for at least five calendar years following the year in which the holding is to be transferred, the total area of agricultural parcels to which the owner's right or the right to use it will be transferred to him in the course of the transfer of that holding for at least five calendar years.
Purchaser
The acquirer may be a natural or legal person,
(a) which is an agricultural entrepreneur under Section 2e of the Act with its registered office or place of business in the Czech Republic,
(b) which, if it is a natural person, is under 40 years of age at the date of the application for inclusion and fulfils the conditions of professional competence under Article 2f (2) (b) of the Act;
(c) which, if it is a legal person, has a maximum of 5 members at the date of the application for inclusion (7), shareholders (8) or members (9) (hereinafter referred to as "participant") who are a natural person and at the date of the application for inclusion are each under 40 years of age; also a person who is a statutory body of a legal person or, where applicable, members of a statutory body of a legal person must comply with that age limit and at least one member of the statutory body must comply with the requirement of professional competence under Paragraph 2f (2) (b) of the Act;
(d) the holding of which is economically viable (hereinafter referred to as "viability") in terms of the economic result achieved or expected to result after tax or in terms of annual net income and the degree of its actual or foreseeable indebtedness referred to in Article 5.
Assessment of the viability of the transferee's holding
(1) The viability of the transferee's holding shall be assessed by the Fund on the basis of the supporting documents submitted together with the application for inclusion.
(2) The Fund shall assess in particular the indebtedness of the transferee's holding, which may not exceed 75% of the book value of the transferee's assets and the profit or loss after tax or the net annual income of the transferee from the holding.
(3) If the acquirer is a natural person, the amount of his net annual income from farming business must be at least equal to the average annual wage in agriculture recorded in accordance with the Special Legislative Decree (10) for the preceding five calendar years; This condition also applies to a person whose income is taxed under a special legislation as income of a cooperating person.
(4) If the acquirer is a legal person, it must be achieved for the last 5 calendar years of positive economic result after tax.
(5) Where the transferee of the holding does not meet the criteria referred to in paragraph 3 or 4 or the transferee has not been an entrepreneur for the entire duration of the five calendar years immediately preceding the year in which the application for inclusion is made, the Fund shall assess the viability of the transferee's holding on the basis of the documents referred to in Article 3 (3) (e).
Classification
(1) The Fund shall, on condition that the applicant fulfils the conditions set out in Article 3 and that the transferee fulfils the conditions set out in Articles 3 (4) (f) and 4.
(2) The Fund shall include the applicant in the programme if the applicant submits to the Fund within 12 months of receipt of the application for inclusion
(a) a contract for the sale of the holding, concluded under special legislation11),
(b) proof of compliance with the undertaking referred to in Article 3 (3) (g) (2);
(c) proof that the applicant has ceased farming;
(d) an affidavit stating that the applicant is not an old-age pension12).
(3) The sale contract referred to in paragraph 2 (a) may be replaced by the applicant by the submission of a donation contract or, where appropriate, a purchase contract which directly transfers to his progeny all the land owned by him belonging to his holding.
(4) Land leased by the applicant may be included in the area of land blocks or parts of land blocks eligible for subsidy under this Regulation only provided that the applicant and the landowner have an agreement to terminate the lease contract and to conclude a lease agreement between the lessor and the applicant's offspring pursuant to paragraph 3, the subject of which shall be the lease of such land for at least five calendar years. This contract shall be submitted to the Fund within the time limit referred to in paragraph 2.
(5) The Fund shall withdraw the conditional classification of the applicant referred to in paragraph 1 if it fails to fulfil the conditions laid down in paragraph 2 or 3, as the case may be.
Subsidy
(1) The Fund grants the grant to the applicant for a maximum period of 15 calendar years starting from the year in which the applicant was included in the programme referred to in Article 6 (2). The subsidy shall be paid in the relevant calendar year, in quarterly instalments, within 30 calendar days of the end of the relevant quarter of the calendar year. The subsidy shall not be granted to the applicant from the calendar year in which it reaches 75 years of age.
(2) The subsidy is determined as the sum of CZK 75,000 and the sum of CZK 4,500 per hectare of agricultural land transferred pursuant to § 6 (2) (a) or § 6 (3) or, where applicable, § 6 (4) respectively, up to a maximum of 30 ha of agricultural land; only soil blocks or parts of soil blocks transferred from the applicant to the transferee in the land register for which the transferee has demonstrated the transfer of ownership or other legal reason for their use shall be included. However, agricultural land the sole owner of which was the acquirer at the date of the application for inclusion shall not be included in the area of agricultural land.
(3) In the year of inclusion in the programme, the amount of the grant shall be one twelfth for each full calendar month for which the applicant has been included in the programme.
(4) In the event that the applicant becomes a pension12), the subsidies referred to in paragraph 2 shall be reduced by the amount paid on the old-age pension for the previous calendar year as from the following calendar year.
Application for subsidy
(1) The application for a subsidy under the programme (hereinafter referred to as "the subsidy application") shall be submitted annually by the applicant to the Fund on the form issued by him by 15 February of the calendar year concerned. The subsidy for the calendar year in which the applicant was included in the programme shall be granted on the basis of the decision to include the applicant in the programme referred to in Article 6 (2).
(2) An application for a subsidy shall be accompanied by an affidavit stating that it is not an old-age pension12) or a certificate certifying the amount paid to it in the old-age pension 12) for the previous calendar year.
Non-grant, refund and exclusion from the programme
(1) The Fund shall decide to exclude the applicant from the programme and to refund the entire amount of the subsidy already granted if it finds that:
(a) the applicant has been re-established as an agricultural entrepreneur under Article 2e of the Act;
(b) the applicant participates in the business of another agricultural operator; or
(c) the applicant has requested the inclusion of the soil block or part of the soil block in the soil register.
(2) If the acquirer fails to fulfil the obligation under Article 3 (4) (f) concerning the area of farming, the Fund shall decide on:
(a) a 10% reduction in the subsidy if the undertaking is breached to an extent exceeding 10% to 20% of the area of agricultural parcels;
(b) a 50% reduction in the subsidy if the undertaking is breached to an extent exceeding 20% to 30% of the area of agricultural parcels;
(c) the cessation of the grant if the undertaking is infringed to an extent exceeding 30% of the area of agricultural parcels.
(3) Where an undertaking under Article 3 (4) (f) relating to the area of farming of agricultural parcels is infringed to an extent not exceeding 10% of the area of agricultural parcels, the procedure laid down in paragraph 2 shall not apply.
(4) The Fund shall also not apply the procedure referred to in paragraph 2 if the acquirer has infringed the obligation referred to in Article 3 (4) (f) on grounds of:
(a) intervention of higher power (13);
(b) the implementation of the land modification (14);
(c) restitution15); or
(d) the implementation of a change in land records pursuant to § 3h of the Act.
Consequences of false data
If the Fund finds that the applicant has provided false data in relation to the conditions for granting the subsidy, it shall follow the directly applicable rules of the European Communities (16).
Efficacy
This Regulation shall enter into force on the 20th day following its publication.
Prime Minister:
JUDr. Gross v. r.
Minister for Agriculture:
Ing. Palas v. r.
1) It is issued for the implementation and within the limits of the law, the content of which allows for an adjustment following the directly applicable regulation of the European Communities by the Government.
2) Council Regulation (EC) No 1257 / 1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations. Commission Regulation (EC) No 817 / 2004 of 29 April 2004 laying down detailed rules for applying Council Regulation (EC) No 1257 / 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF).
3) Article 5 of the Commercial Code.
4) For example Article II of Act No. 85 / 2004 Coll., amending Act No. 252 / 1997 Coll., on Agriculture, as amended, and some other laws.
5) Sections 29, 32, 74, 76 and 94 of Act No. 155 / 1995 Coll., on Pension Insurance, as amended by Act No. 134 / 1997 Coll., Act No. 289 / 1997 Coll., Act No. 118 / 2000 Coll., Act No. 188 / 2001 Coll. and Act No. 425 / 2003 Coll.
6) Act No. 563 / 1991 Coll., on Accounting, as amended by Act No. 117 / 1994 Coll., Act No. 227 / 1997 Coll., Act No. 492 / 2000 Coll., Act No. 353 / 2001 Coll., Act No. 575 / 2002 Coll., Act No. 437 / 2003 Coll. and Act No. 257 / 2004 Coll. Act No. 586 / 1992 Coll., on Income Tax, as amended.
7) Sections 76, 93 and 105 of the Commercial Code.
8) Article 154 of the Commercial Code.
9) Article 221 of the Commercial Code.
10) Act No. 89 / 1995 Coll., on State Statistical Service, as amended by Act No. 356 / 1999 Coll., Act No. 220 / 2000 Coll., Act No. 256 / 2000 Coll., Act No. 411 / 2000 Coll., Act No. 202 / 2002 Coll., Act No. 320 / 2002 Coll., Act No. 81 / 2004 Coll. and Act No. 562 / 2004 Coll.
11) § 476 et seq. of the Commercial Code.
12) Sections 29, 30 to 32, 74, 76 and 94 of Act No. 155 / 1995 Coll., on Pension Insurance, as amended by Act No. 134 / 1997 Coll., Act No. 289 / 1997 Coll., Act No. 118 / 2000 Coll., Act No. 188 / 2001 Coll. and Act No. 425 / 2003 Coll.
13) Article 39 of Commission Regulation (EC) No 817 / 2004.
14) Act No. 139 / 2002 Coll., on Land Adjustment and Land Authorities and amending Act No. 229 / 1991 Coll., on the Treatment of Property Relations with Land and Other Agricultural Property, as amended, as amended, Act No. 309 / 2002 Coll. and Act No. 53 / 2004 Coll.
15) Act No. 229 / 1991 Coll., on the treatment of property relations with land and other agricultural property, as amended by Act No. 42 / 1992 Coll., Act No. 93 / 1992 Coll., Act No. 39 / 1993 Coll., Act No. 183 / 1993 Coll., the Constitutional Court Act No. 30 / 1996 Coll., Act No. 139 / 2002 Coll., Act No. 320 / 2002 Coll., Act No. 253 / 2003 Coll. and Act No. 354 / 2004 Coll.
16) Article 72 of Commission Regulation (EC) No 817 / 2004.
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Regulation Information
| Citation | Government Decree No. 69 / 2005 Coll., laying down the conditions for granting the subsidy in connection with the early cessation of the agricultural activity of an agricultural entrepreneur |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 15.02.2005 |
|---|---|
| Effective from | 07.03.2005 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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