Changes in the SZÉP Card regulations
At the beginning of October, Government Decree 381/2022 (X.6.) was published, which re-regulates the management of unused balances on SZÉP Cards. Details of this new regulation are set out in this newsletter.
Please note at the outset that the new rules only affect unused balances and do not affect employers' tax liability on SZÉP Card benefits. Employers will continue to be liable to pay 15% tax and 13% social contribution tax on fringe benefits.
It also remains unchanged that according to the regulation, the amounts on the card can be used free of charge up to a statutory deadline, and after the deadline, a fee will be deducted from the unspent amounts in proportion to the amount.
By introducing the new regulation, the legislator aims to encourage employees to spend the amounts on the SZÉP Card.
According to the new rules, the amounts on the SZÉP Card can be used free of charge for a shorter period of time (minimum one year instead of two years), and the frequency and rate of the fee deduction have also been changed (from 3% to 15%).
Different rules apply to amounts transferred before and after 15 October 2022.
- Rules for amounts transferred before 15 October 2022
All amounts transferred to the SZÉP Card until 15 October 2022 can be spent free of charge until 31 May 2023.
On 31 May 2023, a 15% fee (but at least HUF 100) will be charged for any unspent benefits from these amounts. The remaining 85% can be used freely, with no further fee charged under the current rules.
- Rules for amounts transferred after 15 October 2022
As a general rule, these amounts can be used free of charge for one year from the date of transfer, but unused amounts will still be subject to a 15% fee (but at least HUF 100) after one year. It is important to note that under the new rules, fees will be charged only twice a year (on 20 March and 20 September).
In this case, it is also true that the fee can only be charged once for the same part of the amount, no additional fee will be charged later.
In both cases, the bank servicing the SZÉP Card should inform the cardholder of the unused balance and the amount of the pre-calculated fee 90 days before the fee is charged.
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Should you have any questions regarding this newsletter,
the tax experts of VGD Hungary will be pleased to assist you.
This newsletter provides general information and does not constitute tax advice.
