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The Hungarian Parliament is discussing a proposal on the amendment of the Act on Electronic Communications in order to implement the regulations of EU Directive 2018/1972. This latter Directive was adopted by the European Union in December 2018 to set up the European Electronic Communications Code. Member Sates shall implement its regulations until 21 December 2020 after a 2-year long preparation period.

Due to the practical difficulties created by the lockdown measures taken against the coronavirus pandemic, the European Council has agreed that the VAT e-commerce package should apply from July 1, 2021, rather than January 1, 2021.

In order to execute the Hungarian Economy Protection Action Plan, some provisions of the Hungarian Bankruptcy Act and the Company Registry Act must be applied differently based on a government decree adopted in the end of May 2020 (Government Decree). As a result, during the state of emergency, a creditor may submit an application for the opening of a liquidation proceeding only if the deadline determined by the creditor in the payment notification and the subsequent 75 days expired without any result. In addition, the amount of the claim must exceed HUF 400,000.

The Hungarian Parliament accepted a bill on 16 June 2020, which would enable the creation of special industrial zones. “The designated special industrial zones will be contributing to the restarting of the economy, creation of new jobs, and also the preservation of the existing jobs” stands in the press release. According to the legislation, the main goal of the regulation is to facilitate a fairer distribution of tax income realized from greater investments as these zones would be no longer under the control of the local council.

The Hungarian Government promulgated a decree (229/2020) entered into force on 1 June 2020, amending the decrees on certain procedural measures in force during an emergency (74/2020.) and on certain penitentiary rules in connection with the declaration of a state of emergency (90/2020.). The amendment regulates civil court proceedings for a transitional period, since on 26 May 2020 two bills related to the termination of the state of emergency were submitted to the Parliament, which define rules of court proceedings for a longer period in the future. As a result, the rules of this decree will only be used until the two bills mentioned above are accepted by the Parliament.

The coronavirus pandemic has been affecting both domestic and international trade and commerce around the world. States have reacted with robust mitigation measures, including closing borders, implementing a range of travel bans and engaging a myriad of internal domestic health and wellbeing procedures. These measures are causing unprecedented disruption to the trade, transport, labor market, production and supply chains.

In the few months since Hungary’s Private Foundation Act came into force on March 29, 2019, it has already significantly grown in terms of financial importance.

“To be honest, I think the government handled the crisis as well as possible," says Levente Csengery, Partner at KCG Partners. “The COVID-19 regulations do exactly what they’re supposed to – protect public health and keep us all alive, and they’re working.“ At the time of writing, Hungary has had 3535 confirmed cases (and 460 deaths) from the new coronavirus. 

The coronavirus epidemic has shown that implementing appropriate occupational safety and health measures and providing adequate conditions are essential in all sectors regardless of the activity. After the coronavirus outbreak, the European Agency for Safety and Health at Work (EU-OSHA) had published a guidance for the workplace. Now, a couple of month later, at the end of April 2020, the EU-OSHA issued guidance on coming back to work. The goal of these non-binding guidelines is to help employers and workers to stay safe and healthy in a working environment that has been changed significantly by the COVID-19 pandemic.

At the end of April 2020, the Hungarian Government submitted to the Parliament a bill on the termination of the undivided joint ownership on agricultural lands and the clarification of the data of the rightholders of properties deemed agricultural land in the land registry, aiming at the establishment of a clear and transparent land ownership structure.

On 10 April 2020, the Government issued Decree No. 102/2020. (IV. 10) and introduced new temporary corporate law measures with the aim of facilitating the decision-making process of the companies in compliance with the restrictions on movement introduced due to the spread of the epidemic.

Subsequent to the previous reduction of the social contribution tax effective from 1 July 2019 (17.5%), which is the main labour-related tax burden of employers, the Hungarian legislation further decreases the social contribution tax as of 1 July 2020.

The Hungarian Government introduced two special taxes from 1 May 2020 in order to tackle the financial effects of the coronavirus disease: the special tax on credit institutions and the tax on commercial chains. According to the official communication of the Ministry of Finance „the goal is that the burden of these taxes – that contribute to the improvement of the balance of public finances – are borne not by the consumers but by the actors that are capable of such.”

Hungary announced and successfully notified to the European Commission a HUF 50 billion (approximately EUR 140 million) aid scheme in April 2020. The subsidy to improve competitiveness has been designed to help the medium-sized and large enterprises that are active in the manufacturing or business services sector that face difficulties due to loss of income and liquidity resulting from the economic impact of the pandemic.

The Hungarian Parliament has started the discussion of the bill that is implementing the provisions of Directive (EU) 2018/1808 of the European Parliament and of the Council of 14 November 2018 (Audiovisual Media Services Directive) (the “Directive”). According to the Directive, Member States must ensure their compliance with the Directive by 19 September 2020.

At the end of March 2020, the Hungarian Government has submitted to the Parliament a bill on the arrangement of the ownership of properties affected by land use right of a producing co-operative (in Hungarian: termelőszövetkezet) and on the amendment of other acts of land-related subject.

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KCG Partners is a Hungarian business law firm providing a comprehensive range of legal services to international and local clients seeking local knowledge and global perspective. The firm comprises business-minded lawyers with sector-specific expertise, creating value for clients by applying a problem-solving approach and delivering innovative solutions.

The firm has a wealth of knowledge in corporate law, M&A, projects and construction, energy, real estate, tax, employment, litigation, privacy and forensics, securitization, estate planning and capital markets.

To address clients’ regional and international concerns, the firm maintains active working relationships with other outstanding independent law firms in Central and Eastern Europe, whilst senior counsel Mr. Blaise Pásztory brings over 40 years’ of US capital market and fund management experience.

KCG Partners Law Firm is the result of the teamwork of passionate and talented lawyers guided by the same principles and sharing the same values: 

  • Our most valuable asset is our people. They are the engine of our business and the key to our success.
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