Some additional measures have been promulgated in connection with the coronavirus pandemic (Government Decrees 97/2020, 103/2020, 104/2020 and 105/2020), the most important of which – from the point of view of taxation and the economy – are summarized in the following.

An extension of the scope of subsidized activities

In our earlier newsletter, we have already informed our Clients that businesses pursuing certain activities, as well as their employees were granted allowances in connection with certain employment-related taxes and contributions. The scope of such allowances was further extended, and now also includes those engaged in the following as their principal business activities:

• plant propagation (TEÁOR and TESZOR 01.30);
• growing of other non-perennial crops (TEÁOR and TESZOR 01.19);
• growing of other perennial crops (TEÁOR and TESZOR 01.29);
• wholesale of flowers and plants (TEÁOR and TESZOR 46.22);
• retail sale of flowers, plants, seeds, fertilisers, pet animals and pet food in specialised stores (TEÁOR and TESZOR 47.76);
• wildlife management and related services (TEÁOR and TESZOR 01.70);
• distilling, rectifying and blending of spirits (TEÁOR and TESZOR 11.01);
• manufacture of wine from grape (TEÁOR and TESZOR 11.02);
• manufacture of beer (TEÁOR and TESZOR 11.05);
• growing of grapes (TEÁOR and TESZOR 01.21).

Subsidy for employers of research and development staff

Under a new rule, employers of research and development staff might be eligible to a subsidy of up to HUF 318,920 per month, for a period of three months (after each research and development employee).
An application for the subsidy is to be submitted by the employer. The applicant is to present the financial circumstances due to which the business is requesting the subsidy, the connection of such circumstances with the coronavirus pandemic, and must make a declaration that the subsidized employee does not receive a subsidy related to working in shorter hours, and that the employer, which had been in operation for at least 6 months, has not received a job creation or job preservation subsidy with respect to the given employee.
The business receiving the subsidy must agree to maintain its average statistical headcount based on the 3-month period before submitting the application (currently, the government decree does not specify a time limit), to continue to employ the subsidized employee for the duration of the subsidy, and not to reduce the wage of the subsidized employee relative to the amount in effect on the first day of the state of alarm.

Subsidy for employees working in short-time

Under a new provision, employees working shorter hours may also be eligible to a subsidy. The most important conditions of eligibility are the following:

• as a result of the amendment of the employment contract, the working time of the employee (in the average of 3 months) is reduced to at least 50%, but not more than 70% of the earlier working time (a condition is employment in at least daily 4 hours);
• the employer and the employee agree on an individual development time above the reduced working hours, which is defined as 30% of the lost working time;
• the employer does not receive any other subsidies related to part-time employment;
• the employment was in place on the date when the state of alarm was declared;
• the employee and the employer submit a joint application;
• the possibilities available for rescheduling working time have been exhausted;
• at the time of the application, the employer did not receive a job creation or job preservation subsidy with respect to the given employee, or a subsidy for research and development staff;
• the working time banking system has been closed.

In its application, the employer must present that the reason for the reduction of the working time is an economic circumstance directly and closely related to the state of alarm, and must certify in a credible way that the maintenance of the employment is in the interest of the national economy related to its ongoing business activities.
By using the subsidy, the employer undertakes an obligation to maintain its average statistical headcount at the time of the application for at least one month, not to order overtime work, and must ensure that the wage paid to the employee with the use of the subsidy is equal or more than the employee’s absentee fee, and that the employer pays wages to the employee for the duration of the development time.
The employee must agree to work in the reduced hours, to be available during the development time, and must ensure not to obstruct returning to work in the earlier number of hours after the subsidized period is over.
If the application satisfies all of the above conditions, the government office pays to the employee a subsidy in the amount of 70% of the net absentee fee payable for the decrease of the working hours for a maximum period of 3 months, which amount may not exceed the proportionate part of the twice the amount of the net minimum wage currently in effect (HUF 214,130). From the point of view of the employee, this subsidy is exempt from taxes and other public duties.

Working time banking

A further change related to employment is that employers may now use a working time banking system covering up to 24 months. A working time banking system earlier introduced can also be extended.