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The discounted 5% VAT rate introduced in 2016 will be abolished as of 1 January 2020, meaning that the 27% VAT rate will be applicable from that date, which can have significant effect on the market. In order to avoid a possible market chaos, the Hungarian Real Estate Development Roundtable Association (IFK) proposed introducing flexible, gradual VAT and stamp duty regulations that may result in increasing tax burden in the next 3-4 years. The new system could ensure that the supply and the sales of the new real estates are not reduced drastically from 2020.

17th October, 2018, Courtyard of Brody Studios, Vörösmarty utca 38, Budapest 1064

The Hungarian Parliament amended the Hungarian Data Protection Act in June 2018 in order to ensure the consistency of the Hungarian legislation with the provisions of the GDPR.

The European Commission („EC”) has launched an infringement proceeding against Hungary in July 2018. According to the EC, the Hungarian law excludes certain cost types from the electricity and internal gas network charges, which are in infringement of the prescribed cost recovery plan set out in the Directive of Electricity and Internal Gas. In addition, the EC also stated that Hungary had accepted certain amendments in its electricity legislature that restricts the right of market operators to ask for a complete judicial review on the decision of network charges of the national regulatory body.

October 9, 2018, Radisson Blu Beke Hotel, Budapest

We are excited to announce that registration for the 2018 Hungary General Counsel Summit is now open. The event will take place at Budapest’s Radisson Blu Beke hotel on October 9, 2018.

Shortly after the expiry of the 9 June 2018 deadline, the Hungarian parliament has finally adopted the new act on the protection of trade secrets ("Trade Secrets Act") which will transpose the Trade Secrets Directive EU 2016/943 into national law.

The Hungarian Parliament has recently adopted legislation with the aim of harmonising the national data protection rules with the rules of the GDPR, and supplementing the national rules in areas not regulated by the GDPR. The Parliament adopted Act XXXVIII of 2018 ("Amendment") in an extraordinary session and the new regulations entered into force on 26 July 2018.

The Hungarian banking transaction tax drives market players and private individuals to use cash rather than electronic payment methods. Eighty per cent of all payment transactions were in cash last year. But extensive use of cash negatively impacts the economy in several ways, such as the high cost of maintaining a large cash volume, easier tax evasion and expansion of grey and black markets.

“The beginning of 2018 brought a comprehensive transformation of legal procedures in Hungary,” reports Andras Daniel Laszlo, Partner at Laszlo Fekete & Bagamery. “Procedural rules changed, from the most basic public administrative procedures, like renewing an ID or applying for a building permit, through commercial litigation and arbitration procedure, including also tax, and, as of July 1, criminal matters.”

Based on the transparency requirements of the GDPR, companies must now provide more detailed information on data processing. The usual form of relaying this information to the public is through a privacy notice. Now that May 25, 2018 is fast approaching and companies are working towards GDPR compliance, such privacy notices must be finalized.

On January 11, 2018, CEE Legal Matters reported that Dentons advised the London branch of UniCredit Bank AG and MUFG as coordinators on a EUR 750 million revolving credit facility provided by a group of 13 banks to MOL Plc, the Hungarian multinational oil and gas company. CMS advised MOL on the deal, which represented the largest financing deal in Hungary in 2017.

On the basis of current practice of the Hungarian tax authority, Hungarian taxpayers are not always able to recover value added tax they pay even the Court of Justice of the European Union had stated the possibility of VAT reclaiming.

The first Hungarian BIM Handbook has been prepared and published on the website of Lechner Tudásközpont on 22 June 2018, free of charge. Building Information Modelling (BIM) is a new approach to design, construction and facility management, where the digital representation of the building process is used to facilitate the exchange and interoperability of information in digital format. BIM is beginning to change the way buildings look, the way they function and how they are designed and built.

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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