The most recent measures of the Hungarian Government adopted and announced in the Official Gazette on 21 April 2020 within the frameworks of the Economic Protection Action Plan are as follows:
1. Tax reliefs
- The taxpayers are granted an extended deadline until 30 September 2020 to comply with the following tax-related obligations that are or become due between 22 April 2020 and 30 September 2020:
the obligation to establish, report and pay the annual and the out of turn corporate tax, furthermore, the obligation to establish and report the tax advance, which obligations are to be performed simultaneously with the submission of the annual tax report in line with Section 26(1) if Act LXXXI of 1996 on the Corporate tax and Dividend Tax (hereinafter referred to as the Corporate Tax Act);
- the obligation to establish, report and pay the annual and the out of turn small enterprise tax, furthermore, the obligation to establish and report the small enterprise tax advance;
- the obligation to establish, report and pay the annual and the out of turn income tax of energy suppliers, furthermore, the obligation to establish and report the tax advance, which obligations are to be performed simultaneously with the submission of the annual tax report;
- the obligation to file the annual and the out of turn local industry tax report and the tax payment obligation that has to be performed simultaneously therewith, furthermore, the obligation to file the tax advance report in respect of the upcoming tax period;
- the obligation to establish, report and pay the annual and the out of turn innovation contribution, furthermore, the obligation to establish and report the tax advance, which obligations are to be performed simultaneously with the submission of the annual contribution report;
2. Reporting-related reliefs
The deadlines for the preparation, publication, depositing and filing (submission, forwarding) of the reports defined in Act C of 2000 on Accounting (including also the reports required by the Government Decrees establishing specific accounting rules upon the authorization granted in the Accounting Act) that would expire between 22 April 2020 and 30 September 2020 shall be extended to 30 September 2020. Furthermore, the deadlines set for further accounting obligations arising from these reports shall also be counted from the extended deadline.
3. Changes concerning fringe benefits credited on ‘Széchenyi Pihenőkártya’
Differently from the prevailing provisions of Section 71(1) of Act CXVII of 1995 on Personal Income Tax (hereinafter referred to as the Personal Income Tax), in the year 2020 the following amounts may be credited on ‘Széchenyi Pihenőkártya’ as a fringe benefit with no social contribution payment obligation:
a. maximum HUF 400,000/year to the ‘accommodation’ subaccount,
b. maximum HUF 265,000/year to the ‘catering’ subaccount,
c. maximum HUF 135,000/year to the ‘leisure’ subaccount.
4. Provisions concerning tourist tax
In respect of the overnight stays spent in tourist accommodations between 26 April 2020 and 31 December 2020 the tourist tax shall not be paid by the taxable person and shall not be collected and paid by the tax collecting person; however, the latter shall file a report to the tax authority on the amount of the tax established but uncollected. No tax report shall be filed if the amount of the tax is nil.
5. Amendments to further tax-related rules
In addition to the above, the rates of social contribution and simplified tax contribution were amended. Certain changes are introduced, affecting the conditions of eligibility for health services and tax administration.
6. Subsidy for reduced working hours
The conditions of application for a state subsidy for employing workers in reduced working time are amended to widen the access thereto.
– From now on, the employees whose employment contracts were amended after the announcement of the emergency situation and who are now employed (under the amended contract) in a working time that is minimum 25%, maximum 85% of their working time under the original employment contract, calculated in three-month average, are also entitled to the subsidy.
– As a result of the amendment, the obligation to maintain the number of the staff shall apply only in respect of the employee with whom the joint application is filed by the employer.
– The basic salary to be taken into consideration when establishing the reduced working time is the basic salary paid as of the day of filing the application. The service fee (as defined in GKM Decree No. 71/2005 (IX.27.) on the Establishment of the Service Fee rate and the Rules Concerning the Application and Use of the Service Fee) as of the day of announcement of the emergency situation shall also be included in the amount of the basic salary.
– The criteria applicable to the employers are amended as follows:
- the employer shall employ the joint applicant employee in reduced working time (including the employment in the form of home office or remote work) in order to prevent staff reduction,
- the employer operates for more than six months,
- at the time of filing the application, no subsidy is paid to the employer under either the Government Decree No. 103/2020 (IV.10.) on the Aiding of Employment of Researchers and Developers During the Emergency Situation Within the Frameworks of the Economic Protection Action Plan (hereinafter referred to as the Government Decree No. 103/2020) or any other wage-type subsidy granted from EU funds to encourage job protection or job creation in respect of the joint applicant employee.
– As a result of the amendments, the amount of the subsidy is currently 70% of the proportionate share of the basic salary (reduced by the personal income tax and contributions calculated according to the general rules) due for the stand-down time. The maximum amount of the basic salary, reduced by the payable taxes and contributions that may be taken into consideration when determining the monthly amount of the subsidy may not exceed twice the compulsory minimal wage, reduced by the payable taxes and contributions, as of the date of the submission of the application.
– The rules on the joint undertakings concerning the working time are also amended; hence, by accepting the subsidy, the employer and employee undertake
a. to agree on working in reduced working time, and
b. if the reduced working time is more than half of the employee’s former working time (prior to the amendment of the employment contract), to agree on the devotion of time to the employee’s individual development (over the reduced working hours), at least for the duration of receiving the subsidy.
If the reduced working time does not exceed the half of the employee’s former working time (prior to the amendment of the employment contract), the employer and the employee may agree on the devotion of time to the employee’s individual development.
– The rules on the employer’s subsidy-related undertakings are also amended; hence, by accepting the subsidy, the employer undertakes
a. to maintain the same number of staff for at least the duration of receiving the subsidy plus one month,
b. to refrain from ordering overtime work in respect of the employee after whom the subsidy is granted, for the entire duration of receiving the subsidy, and
c. to notify the government office of any change concerning the conditions of the subsidy and the reduced working hours within two working days of the occurrence thereof, in line with the employer’s notification and cooperation obligation,
d. including if the employee’s salary plus the subsidy becomes equal to or exceeds the basic salary of the employee any time during the term of the subsidy (except if the reduced working time does not exceed half of the employee’s former working time, prior to the amendment of the employment contract).
e. to pay salary for the individual development time (except if the reduced working time does not exceed half of the employee’s former working time prior to the amendment of the employment contract).
– As a result of the amendments, the subsidy may be granted if
a. there is no payment obligation of the employer related to the subsidy, ordered by the final and binding decision of the state employment authority,
b. the employer
- complies with the requirements of ordinate employment relations (as defined in the Government Decree on the Execution of the State Finance Act) and such compliance is certified in a form required in a separate law, and
- is not subject to a winding-up- or liquidation proceeding initiated by a final and binding decision, there is no bankruptcy proceeding or any other, law-based process aimed at the termination of the employer, ordered by a final and binding decision,
- demonstrates that the economic reason for ordering working in reduced working time is directly and closely related to the emergency situation, and provides a credible justification to prove that keeping the employees promotes the continuous operation of the employer, thus, is in the interest of the economy at large.
– In the case of derogation from the employment contract (Section 53 of the Labour Code), no subsidy can be granted; however, contrary to the previous rules, temporary agency work will be eligible for the subsidy.
– The amendment relieves the employer from the payment obligation arising from the non-compliance with the obligation to maintain the same number of staff, even if the employment was justifiably terminated by the employer’s extraordinary termination with immediate effect.
7. The credits and guarantees provided by Magyar Fejlesztési Bank and Garantiqa Hitelgarancia
The Government Decree regulates the provision of a funding package by Magyar Fejlesztési Bank and the related group of companies to the Hungarian enterprises, by granting credit- capital- and guarantee in coordinated programmes.