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On Thursday, 26 March 2020 the Hungarian tax authority shared a communication about the omissions made during the pandemic situation. This communication affects all taxpayers, even those, which are not benefiting from the (already announced) supports of the Government.
If a taxpayer gets into a situation beyond its fault, because of which it is not able to or it is only able to fulfill its tax liabilities with material delay, then the tax authority is going to use reasonable proceedings when establishing the respective consequences.
However, for the reasonable proceedings the tax payer should report to the tax authority the reason of the omission at the earliest opportunity after the elapse of the original due date. In this announcement the taxpayer should refer to the fact that the omission was caused by the pandemic emergency situation. The tax authority will consider this announcement and the individual circumstances of the case when deciding on the consequences, further it might also decide not to levy any penalty and/or late payment interest.
We do hope that we could be at your service with this information. Should you have any further queries, please feel free, to contact us!
On 27th March, 2020 new government decrees were published in connection with the emergency situation caused by the coronavirus. Among others, the new decrees also contain tax related regulations. According to the new rules, the scope of activities eligible for exemption from contribution payment obligation on the salaries for the period from March to June, was extended (in case the company is obliged to pay rehabilitation contribution, its amount will only decrease). The employees of such beneficiary companies (out of all types of social contributions) are only obliged to pay health insurance contribution in kind (4%) with respect to their income, applying a maximum of HUF 7,710 per month.
The scope of the beneficiary companies was extended with companies performing travel agency, tour operator, other reservation and inland passenger water transport services, as well as physical well-being activities. However, taxpayers providing physical well-being activities are eligible for the exemption only if they qualify as public bath.
We do hope that we could be at your service with this information. Should you have any further queries, please feel free, to contact us!
On 23 March 2020, Monday, the Government announced yet another package of immediate measures aimed at the alleviation of the effects of the coronavirus pandemic on the national economy, which contains the following decisions.
The scope of entrepreneurs and companies exempted from the payment of their KATA (Fixed-rate Tax of Small Taxpayer Enterprises) payment liabilities for the months of March, April, May and June 2020 has been further extended. The exemption will cover businesses pursuing activities, without limitation, in the following areas: hair and beauty care, painting, glazing, human healthcare, electrical installations, physical well-being activities, performing arts, plumbing, heat and air conditioning installation, floor and wall covering work, organising conferences and trade shows, tourism services, catering and hospitality, gambling, the provision of non-residential social services for the elderly and people with disabilities.
The exemption from KATA will not affect the right to social security services.
KATA subjects with tax liabilities becoming due before 1 March 2020 will have the possibility to pay their tax liabilities in 10 equal instalments from the first month following the quarter in which the state of alarm is lifted, together with the KATA payment due in that month. In this case, a late payment surcharge will not arise. However, if the KATA subjects are late with the payment of this deferred tax liability, the whole amount of their earlier debt increased by the late payment surcharge will become due.
The scope of activities in which employers will be temporarily exempted from the obligation to pay social contributions after the wages was also extended, while employees of such businesses will only have to pay the health insurance contribution in kind (4%, but a maximum of HUF 7,710 per month) for the period of March to June 2020. Such employers are also entitled for reduction of the rehabilitation contribution for the above-mentioned period: the annual amount of the contribution decreases from HUF 1,449,000 to HUF 966,000 per employee which is 2/3-rds of the original amount. Further on, the employers are not liable to rehabilitation contribution advance payments.
The businesses eligible to these exemptions will be taxi operators, publishers of daily newspapers and periodicals, as well as broadcasting service providers. In addition, the Government – by way of specifying the exact NACE business activity codes – also clarified the scope of activities exempted by way of its earlier announcement.
An important clarification was also introduced with respect to the “principal activity” set as the condition of the exemption. Only those businesses and their employees will be exempted from the contribution payment obligation, where at least 30% of the revenue of the business in the past 6 months came from one of the activities specified as exempted.
The tax returns filing periods applicable to those required to pay the tourism development contribution will change as follows:
- taxpayers required to file quarterly will file their returns for the period between 1 January 2020 and 29 February 2020;
- taxpayers required to file annually will file their returns on the periods 1 January 2020 to 29 February 2020 and 1 July 2020 to 31 December 2020.
For the duration of the state of alarm, judicial execution proceedings (evictions, attachments) will be suspended. The enforcement of tax liabilities will also be suspended, and these proceedings will only resume from the 15th day after the end of the state of alarm.
Certain health insurance and family support benefits that would otherwise expire during the state of alarm period will be automatically renewed. In other words, the childcare benefit, childcare fee and childcare support will be paid to the current beneficiaries until the end of the state of alarm.
Finally, the limit under which a strong client authentication (e.g. the entering of a PIN code) is not required in case of electronic contactless payments will be increased. From 25 March 2020, this limit will increase to HUF 15,000, and this is applicable from 15 April at the latest.
We do hope that we could be at your service with this information. Should you have any further queries, please feel free, to contact us!
Having regard to the exceptional situation caused by the coronavirus, on Tuesday March 24th, 2020 the tax authority announced that amendment of the XSD-scheme to be uploaded to the Online Invoice system is postponed. Thus, instead of the originally declared due date of April 1st, 2020, the new 2.0 data structure will have to be used only from July 1st, 2020. Accordingly, the currently applicable 1.1 version can be applied for 3 additional months.
However, the tax authority has emphasized, that the 2.0 system can already be used in the live environment, simultaneously with the previous version. Further, it was recommended that the taxpayers complete the switch to the new scheme as soon as possible.
We do hope that we could be at your service with this information. Should you have any further queries, please feel free, to contact us!
On Wednesday 18 March 2020 the Hungarian Government announced a package of immediate measures aimed at protecting the national economy from the negative economic effects of the coronavirus pandemic. The measures comprise the below, most urgent decisions:
1. Deferment of all loan payments (capital installments, interest and fees) for individuals and companies until the end of 2020 under any credit, loan and finance leasing contracts concluded before 24:00 hrs of 18 March 2020. The Government may prolong this moratorium later on if necessary. The debtors may, however, opt for adhering to the original contract arrangements;
2. Any credit or loan or finance leasing contracts in force at 24:00 hrs of 18 March 2020 that mature during the emergency period are automatically prolonged until 31 December 2020;
3. The APRs (annual percentage rates) of any new consumer loans taken out starting from 19 March 2020, shall be capped at the Central Bank’s base rate plus 5% maximum (currently 5.9%);
4. The Government undertakes the following measures for the period from 1 March to 30 June 2020 with regard to the sectors most affected by coronavirus, namely tourism, hospitality, entertainment, gambling, film industry, performance art, event-management, sporting services;
- employers are exempted from paying social contributions on employees’ payroll;
- employee contributions will comprise health insurance contributions only (4%) and are capped at HUF 7,710 per month;
- rental contracts cannot be terminated, and rental fees cannot be increased. The Government may prolong this termination and fee increase moratorium later on if necessary;
- those liable to tourism development contribution will be exempted from paying it for the above-mentioned period.
5. The private entrepreneur taxi drivers who have opted for the Fixed-rate Tax of Small Taxpayer Enterprises (KATA) will be exempted from paying the KATA tax for the period from 1 March to 30 June 2020;
6. New regulations are implemented with the aim of making employment laws more flexible, including the employers’ right to unilaterally impose working from home office (with some exceptions applicable to collective labour agreements).
The Government Decree was published on 18 March 2020. The above, most urgent measures are expected to be followed by new provisions.
In our newsletters we will keep our Clients informed of any new developments.
Dear Clients,
With regards to Coronavirus, we would like to inform you that Grant Thornton Hungary took all the necessary measures to maintain our business operations ensuring you continuously receive the highest quality service without disruption.
We are at your disposal for any questions.
With kindest regards,
Your Grant Thornton Team