On September 11, 2018, CEE Legal Matters reported that Akos Eros, the Managing Partner of Squire Patton Boggs in Hungary, had taken a team from that international firm to join Wolf Theiss, led in Budapest by his old friend Zoltan Faludi. The reunion of these two actual comrades-in-arms is a source of real excitement at Wolf Theiss Hungary, which is embracing the changing legal market of the moment with confidence and style.
On 20 November 2018, the European Parliament’s Committee on Employment and Social Affairs (“EMPL”) adopted modernised rules for coordinating social security systems. The EMPL focused on facilitating labour mobility while safeguarding the workers’ social security rights in cross-border situations, by determining under which Member State’ s system a person is insured. The purpose of the new rules is to make it easier for EU citizens to work in another EU Member State and to have a fair access to social security benefits.
Taylor Wessing Budapest, working with lawyers from America's Nixon Peabody law firm, has helped persuade the United States Supreme Court to uphold a lower court's ruling that US courts lack jurisdiction over the Hungarian State in a lawsuit involving the attempted restitution of artworks that once belonged to the Herzog Collection. The Court published its decision on January 7, 2019.
The Hungarian Act on the Employee Stock Ownership Plan (the “ESOP Act”) was amended by the Hungarian Parliament in November 2019. It is good news that the amendment does not affect the taxation of incomes from the ESOP organization, so it is still possible to get a private income through an ESOP under very favorable tax conditions. Accordingly, payments made to the employees within the ESOP are solely subject to a 15% personal income tax, which means 18.5% savings for the employees, while on the other hand employers can reduce their public burdens with 21%.
In December 2018 the Hungarian Parliament adopted a new legislation that significantly changes the Hungarian Labour Code. The proposer stated that the goal of this new legislation is ‘to remove administrative burdens from the employees, so if they want to earn more – with their consent – they can work more’.
An amendment to the act on industrial properties enters into force on 1 January 2019. Such amendment not only modifies the existing trademark procedures, but also creates a more efficient, fast and customer-friendly system. Due to this modification, the Hungarian trademark legislation will also be conform with the requirements of the applicable EU directive.
Factoring is an increasingly popular product of banks that appeals to corporate clients of whatever size as it provides liquidity to the clients and stable cash flow. The factoring is usually structures in a way that the vendors of the client do not receive information on the factoring, the bank stays in the background; the relationship between the client and its vendor remains intact. In practice, this means that the client continues to collect the amounts the vendor owes, although such amounts do not belong to the client anymore. Also, it is not uncommon that even the soft workout stage stays with the client in case the vendor is in delay with its payment obligation; i.e. the client will be obliged to chase its vendor for the money.
Kinstellar and Ashurst have advised the Dedica Anthology hotel group, owned by Varde Partners, on a EUR 337 million bond financing related to its 2017 takeover of Italian hotel group Gruppo Buscolo. The debt provider, Blackstone Real Estate Debt Strategies, was advised by Lakatos, Koves & Partners, Clifford Chance's Milan office.
The Hungarian Competition Authority (HCA) recently published a strategy paper presenting its views on consumer protection in the digital age. The paper subtly indicates that the HCA will continue to follow the European Commission's guidance in this regard. The paper highlights the measures which the HCA deems necessary to protect consumers and keep up with the developments and companies central to this process.
CMS Budapest has advised the Futureal Group on the sale of its six existing office buildings and two office buildings currently under construction, together referred to as the Corvin Office Portfolio, to OTP Real Estate Investment Fund Management. DLA Piper reportedly represented the OTP Group on the acquisition.
From January 2019 the VAT exemption threshold for individuals will be increased to HUF 12 million from the current limit of HUF 8 million. During the summer 2018 the Hungarian Parliament had already adopted the tax rules applicable in 2019, however, some adjustments had to be made in autumn to fully comply with the EU law.
There can be even 1 million wells or borehole in Hungary with an unclarified status that had been built without a permit in the last decades. As water becomes an even more valuable resource, countries should represent a responsible approach in their water management. This is why the Hungarian Government amended the law on water management by establishing a moratorium until the end of 2018, during which period well and borehole owners can obtain a permit from the competent authority without being fined. This exemption applies only to water sources that were set up before 1 January 2018.