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!