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COVID Tax Measures Updated in Hungary

COVID Tax Measures Updated in Hungary

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Latest tax reliefs aim to support tourism and travel industry in Hungary, as tourism was one of the most affected sectors by COVID pandemic. In order to boost the restart of domestic tourism, the latest governmental decree of 381/2021 introduced several new tax measures, mainly for this sector. As a result, tourism development contribution of 4% is still not payable by the end of 2021.

Furthermore, amounts received on (and spent from) the so called SZÉP-card enjoy a beneficial tax treatment. SZÉP-card has been introduced back in 2012 as a cafeteria option that can be spent on accommodation, hospitality and recreational services. Payment by the employers to SZÉP-card has preferential tax treatment compared to the general tax rate applicable to salary within the given thresholds (previously HUF 450,000, equivalent to EUR 1,250). In order to facilitate domestic tourism, the preferential threshold is increased, up to the aggregate of HUF 800,000 (EUR 2,200) for the entire 2021 year. Also, these amounts are exempted from social contribution tax of 15.5%, practically decreasing the effective tax rate to half.

Social contribution tax exemption is also applicable for business gifts and ‘representation’ services, covering hospitality (food and beverages) provided during a business, official, trade, diplomatic or religious event in connection with the activities of the provider. Additionally, COVID-specific tax payment reliefs have also been upheld: SMEs may apply for payment in instalments, deferred payment and even partial tax reduction for tax debts under HUF 5 million (approximately EUR 14,000) by the end of 2021.

By Balint Zsoldos, Head of Tax, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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