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Under a non-compete agreement, the employer may restrict the ex-employee’s business activity for a period of maximum 2 years following the termination of employment and in exchange, the employer shall pay adequate compensation to the employee - the amount of which may not be less than 1/3 of the base wage due for the same period. The Hungarian Supreme Court (Curia) published in September 2019 a report on the judicial practice relating to non-compete agreements, which highlights the following findings:

On 24 September 2019 the commencement of the electronical land registry (E-Land registry) project was announced aiming at the development of real estate and land issues. As a result of the E-Land registry, a safer, more transparent and faster system will be established, which would also enable automatic decision-making processes. This step follows the electronization of the administrative processes resulting in the decrease of the lead time and costs of the land registry procedures and the increase of the legal certainty.

What did the GDPR bring us? “A lot of compliance work,” most clients would say, after months of tough and challenging work implementing the European Union’s new comprehensive data protection regulation. And in many cases that work is still unfinished. The prevalent view on the market is that the regulation is an artificial creation of another compliance requirement upon data controllers. But is it fair to say that the GDPR brought nothing but a very expensive compliance exercise?

In September 2019, the Hungarian Supreme Court (Curia) stated in its decision that even in case of a warning strike, the employer must be notified on the strike at a time that allows the exercise of its right to prevent damages caused by the stop of operations, and also to perform its obligation to protect life and property and to perform any organisational work related to these rights and obligations.

It has long been a problem that the tax authority refuses to refund to a supplier the VAT that has already paid by him, even if the customer has not paid the gross purchase price at all. However, in a recent ruling, the European Court of Justice has clearly ruled that if the claim has become definitively unrecoverable, the Hungarian tax authority NAV is also required to refund the VAT on that claim to the seller. This decision now also allows other affected taxpayers to request a refund of the VAT on their unrecoverable receivables within a maximum of six months.

Company information was available without any restriction in the database of the Hungarian Ministry of Justice. As of 1 October 2019, there was a change in the recognition of company information, since the electronic company register was replaced by a so called online real-time company information.

The provisions of the corporate taxpayer group is applicable from 1 January 2019, and despite the short preparatory period, more than 200 company groups have so far taken advantage of this opportunity in 2019. This possibility will be open again from 1 November to 20 November 2019.

Peter Paroczi, the former Director Counsel for Harman International, has left the Budapest office of the US-based consumer electronics company toa become the Compliance Officer of the Qatar Fertiliser Company in Doha, Qatar.

This April, the new EU foreign investment screening regulation entered into force, with terms scheduled to become applicable on October 11, 2020. The regulation was conceived and designed to provide member states with a valuable tool to employ in defending their strategic interests. We spoke to several experts in the region to learn more.

Hungary is an ideal location for international tax planning. Below we summarize the 5 most important features of the Hungarian tax system that can make the country attractive for international investors and public and private multinational groups.

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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