The Czech Republic adopted an amendment to Act No. 496/2012 Coll., on Audiovisual Works and Cinematography Support and on the Amendment of Certain Acts, as amended, which brings significant changes to the audiovisual industry (the Bill) with the effect from 1 January 2025.
Key changes introduced by the Bill include the establishment of state support for video games and a change in the fee obligations that will also newly apply to foreign providers of audiovisual media services on demand (AVMS) targeting Czech customers. These two key developments are explored in more detail in our two-part article (the first part is available here).
Changes to the AVMS Fee
In the Czech Republic, a fee for providing AVMS (the Fee) already exists. However, the Bill makes significant changes to the Fee in three key areas:
- it expands the scope of Fee payers to include AVMS providers not established in the Czech Republic but targeting Czech customers;
- it increases the Fee rate from the current 0.5% to 1–3.5%;
- it broadens the Fee base to include revenue from audiovisual commercial communications.
The targeting of Czech customers will be assessed in accordance with Article 13(2) of Directive (EU) 2010/13 on Audiovisual Media Services, as amended by Directive (EU) 2018/1808. The criteria for assessing if a service targets Czech customers include advertising or other promotional content aimed specifically at Czech customers, the service being in Czech, or the existence of content or commercial communications targeted at Czech customers.
According to the Bill, the Fee will be composed of two parts:
- a component fee of up to 2% from revenues; and
- a component fee of up to 1.5% from revenues for unrealised direct investments.
The base for the component fee from revenues will be the total revenues from providing AVMS, i.e. amounts paid by customers for the one-off provision of AVMS or subscriptions, and the total revenues from audiovisual commercial communications viewed in relation to AVMS, i.e. amounts paid by advertisers (AVMS Revenues).
The component fee from revenues may be reduced by up to 50% by a discount for additional direct investments. This discount can be apply up to the total amount of the additional direct investments.
The component fee from revenues may be reduced by up to 50% by a discount for additional direct investments. This discount can apply up to the total amount of the additional direct investments.
The amount of the component fee for unrealised direct investments will be calculated as the positive difference between 1.5% from the AVMS Revenues and the total amount of direct investments. Therefore, if the AVMS provider spends on direct investments an amount equal to at least 1.5% of the AVMS Revenues, this component fee will be CZK 0.
AVMS providers whose services generate low turnover or have low audience will be exempt from the Fee.
Summary
The Fee obligation requires the AVMS providers to pay at least 1% of their AVMS Revenues to the newly called Czech Audiovisual Fund (the Fund). Additionally, providers may be required to pay up to another 2.5% of their AVMS Revenues to the Fund, depending on (non)fulfilment of the direct investment requirements.
If you are interested in the topic of audiovisual fees and want to know more, contact your CMS client partner or our regulatory expert Jan Ježek.
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