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Corona virus - Tax News Hungary - March 19, 2020
On 18 March 2020 the Hungarian Government issued its first group os measures aimed to support companies and employees in distress due to the Corona virus epidemic.
The most important of actions are the following:
- Moratorium on paying debts to financial institutions: Based on the decree, all payment liabilities of individuals and companies in connection with credits, loans and financial leasing contracts signed prior to 19 March 2020 – including capital, interest and all fees – with financial service providers are suspended at least until 31 December 2020, but the Government can extend this later. The suspension also covers the additional liabilities that serve as security for the contract. Of course, the debtor has the right to continue paying off the debt as normal.
- Facilitation of employment law rules for easier compliance with epidemic measures: Until 30 days after the state of emergency in Hungary is lifted, certain rules of the Hungarian labour code are made more flexible in order to give more room for employers to determine and modify the working conditions of employees.
- the employee’s work schedule can be communicated within shorter notice,
- home office and remote work can be ordered unilaterally by the employer without the employee’s consent,
- the employees’ health status can be checked with reasonable methods,
- collective agreements that contain contradicting rules are not binding for the contradicting parts.
- Payment of social security contributions in „distressed sectors”: The Hungarian Government defined the following industries as „distressed sectors”: turism, catering, entertainment, gambling, film production, acting, event organizing, or sport services. Between March and June 2020 economic units active in distressed sectors are subject to the following benefits: The employer is not required to pay employer’s part of social security liabilities (17.5% social tax, vocational training contributions) and from the employees’ part of social contributions only the 4 % of social contributions in nature is payable, the latter of which cannot exceed HUF 7,710 per month.
- Maximalization of the total credit indicator (THM) in case of consumer credits: In case of consumer credits provided after 19 March 2020, which are not secured by mortgage, the Government maximalizes the amount of the total credit indicator in the amount of the national bank base exchange rate (currently 0.9 percent) plus 5 percent, i.e. these types of credits can be given at a maximum of 5.9 percent THM.
- Tourism-development contribution is also not payable by those who are otherwise obligated to pay it between March and June, and no reporting obligation is required either.
- No termination of rental contracts of business premises in distressed sectors: Rental contracts of non-residential premises cannot be terminated at least until the 30th of June 2020 in the distressed sectors listed above.