Hungary takes action to support companies hit by the Coronavirus crisis
The Hungarian government has announced a package of economic measures to support businesses that are suffering under the pandemic
The Hungarian government has announced a major aid package to mitigate the economic impact of the coronavirus outbreak on the country’s businesses. (Government Decree 47/2020 (III.18)) The text of the Decree is available in Hungarian HERE.)
Major elements of the package include a loan repayment moratorium; a cap on interest rates; economic assistance to sectors already seriously affected; increasing the flexibility of employment laws; and providing support for companies on tax payments and administration.
1. Loan repayment moratorium, interest rate cup
Credit, loan, financial leasing:
- Capital and interest payment obligations for loans to private individuals and businesses signed until midnight on Wednesday will be suspended until the end of the year. The payment moratorium applies to all credit and loan agreements and financial leasing agreements (repayment moratorium). The payment moratorium will expire on 31 December 2020 (this may be extended by decree).
- A payment moratorium does not affect the owe’s right to perform according to the original contractual terms,i.e. to settle his payments within the contractual term.
- Deadlines and commitments are extended by the payment moratorium. The contract which expires during the period of the emergency shall be extended until 31 December 2020.
- The above rules shall apply to loans already contracted at 24:00 on 18 March 2020.
Consumer credit loans
In the case of consumer credit loans that are not secured by lien concluded after the entry into after the entry into force of the Regulation, the APR may not exceed the central bank base rate (currently 0.9%) plus 5 percentage points.
2. Sectoral measures
The following sectors, which are in serious trouble, will receive business-relief facilities:
• Catering
• Tourism
• Entertainment industry
• Film industry
• Sports Service
• Event organization
• Passenger transport (taxi)
• Gambling/lottery
Until 30 June 2020, companies operating in the above sectors:
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- the employer is exempt from the payment of employer contributions of salary;
- for the employee only the health insurance contribution is payable, provided that the monthly amount cannot exceed the monthly health care contribution, HUF 7710.
For the above sectors, leases for non-residential premises may not be terminated by 30 June 2020. The ban on notice may be extended by a regulation (until the emergency occurs).
The rent under the aforementioned leases shall not be increased during an emergency, even if otherwise permitted by the contract.
Those obliged to pay the tourism development contribution shall not be obliged to pay the tourism development contribution from 1 March 2020 to 30 June 2020, during which time the tourism development contribution shall not be declared and established.
3. Labor law issues
Working rules are made more flexible, so that employers can flexibly regulate remote working and working conditions during an emergency. Thus, the provisions of paragraphs 2 to 4 of the Labor Code 2012 are applied with different rules until the 30th day after the end of the national emergency.
40/2020. (III. 11.) In order to comply with the prohibitions and restrictions imposed during the period of emergency ordered by Decree I (III. 11.) of the Labor Code of 2012 (hereinafter referred to as: Mt.):
(2) The Mt. shall apply for a period of 30 days following the end of the emergency, with the exception that:
- the employer may modify the announced working time schedule differently from the rules of communication under Article 97 (5) of the Labor Code,
- the employer may unilaterally assign the worker to work from home and for teleworking,
- the employer may take any necessary and justifiable measures to monitor the worker's state of health.
3. Collective agreement provisions other than those in paragraph 2 shall not apply during the period covered by this Regulation.
(4) The employee and the employer may derogate from the provisions of the Labor Code by special agreement.
4. Further simplifications in tax administration and tax obligations
NAV (Hungarian Tax Office) handles fair payment requests made by entrepreneurs, including reductions in tax advances, tax deferral, or deferred payment.
The amount of the quarterly corporate tax advance is determined based on the performance of the previous business year. In any case, it is worth asking for a reduction if the coronavirus epidemic has reduced revenues to such an extent that the corporate tax is less than the amount of the tax advance payable in the tax year. For the easy procedure, it is sufficient to fill in a form called ‘elolegmod ‘ is available on the tax office's website, and submit it electronically.
Deadline! Those who are required to pay monthly advances can apply for a reduction of the tax advance until March 20, and quarterly advance payments by April 20.
In addition to the corporate tax advance, the amount of the small business tax (KIVA), innovation contribution, and energy supplier income tax advance may also be reduced.
Due to the revenue-reducing effect of the coronavirus, deferral or payment by instalments may be requested. For example, businesses pay social contributions tax to their employees monthly, 210 thousand farmers pay VAT every month, and 170 thousand pay quarterly, all of which can be requested from the tax office, as well as special types of tax, so small business According to the tax (excise duty) and the specific tax (kata) of small taxing enterprises, taxpayers may also apply to the authority for support, which is a fair attitude by the NAV.
Further economic measures are expected, and we will keep you informed.
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Phone: +36 1 225 7575 E-mail: vgd.budapest@vgd.hu
