Hungary announced to cut the tax on cryptocurrency earnings by 50% to encourage investors to declare income from trading digital tokens such as Bitcoin. The Hungarian Parliament accepted the tax package for 2022 on 9 June 2021. The package contains inter alia significant simplification and tax reduction with regards cryptocurrencies.

On 27 April 2021 the Hungarian Parliament adopted a new legislation on the Supervisory Authority for Regulated Services, which will in the future supervise the judicial enforcement body, the liquidators and perform official tasks related to the retail sale of tobacco products and the organization of gambling. The new laws will enter into force on 1 October 2021. The purpose of the law is to strengthen the consumer protection, official control and supervision powers in relation to certain exclusive economic activities of the state.

Based on a bill submitted on 20 April 2021, the new law establishing the ultimate beneficial owner register (UBO) may enter into force on 15 May 2021. According to the bill, the UBO will be based on data obtained by banks in the course of the customer due diligence under the Hungarian Anti Money Laundering Act (AML Act), which data will be passed on to the body maintaining the UBO (i.e. the Hungarian tax authority). After the system is set up, each organization involved will receive a registration number and a TT index.

Latest proposal by the Hungarian Ministry of Finance aims to extend tax measures to help Hungarian SMEs.

On 20 April 2021 the Hungarian Government submitted a bill on the Land Register to the Hungarian Parliament. The Government decided on the implementation of the electronic land register project, which requires a new Act on the Land Register, as well as a related execution decree. The purpose of the new system is in particular to develop the land register to an electronic database, completely electronize the land register procedures, connect the land register with other public electronic registers of the state and decrease the time and costs of these proceedings.

According to an information letter issued by the Hungarian National Authority for Data Protection and Freedom of Information (NAIH) on 1 April 2021, employers can only request proof of protection against COVID-19 (e.g. proof of having the vaccine or recovered from COVID19) in certain jobs and after an appropriate risk analysis. If the employer has an appropriate legal basis to process the immunity data, he is obliged to put appropriate measures in place in order to protect its employees against COVID-19 infection. According to the NAIH, the legislator should further precise the requirements for justifying the immunity against COVID-19 in employment relationships.

The concept of “rust zones” was introduced by the Hungarian legislation in 2020, covering neglected area reserves. Rust zones, due to the expansion of the cities, are now wedged into the urban environment and are mainly unused due to previous pollution typically resulting from industrial activities. By applying a reduced VAT rate of only 5% and other economically stimulating regulatory elements, these zones can become valuable to investors again and can be reused and reintegrated into the cities. By doing so, the goal is to encourage the construction of affordable, new housing and creating construction jobs which can provide significant help to the construction industry weakened by the effects of the coronavirus pandemic.

On 10 March 2021, a new Government decree was passed aiming to ease construction work processes by not requiring certain safety measures. The decree is not to be applied for high value (above HUF 700 million) projects, public procurements and defensive or security procurements.

A new Government Decree enters into force on 5 May 2021 about the creation of a free (state financed) data erasure application. The National Media and Infocommunications Authority (NMHH) is currently working on the application; their goal is to create a user friendly and secure software until 1 May 2021, which the public will be able to download form the site of the NMHH free of charge.

The Hungarian tax authority published its annual tax audit guidelines with the clear aim of supporting compliant taxpayers and take firm actions against intentional tax evasion by utilizing additional data sources in the process as well.

In 2014 Hungary introduced the advertisement tax as a direct business tax that must be paid by media content and service providers and publishers of advertisements. The tax base was the net sales revenue originating from the taxable activities in the tax year, i.e. the turnover and not the profit, and a progressive tax rate was established originally with six tax rates between 0% and 40%. The Advertisement Tax Act also provided that taxable persons whose pre-tax profits for the 2013 financial year were zero or negative, could deduct from their 2014 taxable amount 50% of the losses carried forward from the earlier financial years (“mechanism for partial deductibility of losses carried forward”).

For our Checking In feature, we reach out to partners and heads of practice across CEE to learn how specific practice areas are faring in their jurisdictions. This time around we asked Data Protection experts: Overall, how compliant would you say economic agents are with relevant local regulations on data protection, and what are the main gaps that have yet to be addressed?

According to a Government Decree passed on 9 February 2021, lessees do not have to pay rent for a property owned by the Hungarian State or the local municipality (or by companies which are controlled by these) for the specified five-month period (February - June 2021). The decree specifies a list of 25 types of activities which are to be alleviated from paying rent, which includes:

In February 2021 the State Secretary of Labour of the Ministry for Innovation and Technology announced a new measure to fight black employment. The amendment of the Act on the Service and Support to Subserve the Employment, and on the Supervisory of Employment (Act) is already in effect since 1 March 2021.

The rules of obligatory invoice data supply were modified as of 4 January 2021 in a way that the data of such invoices, modifying or annulling invoices, which are subject to the invoicing requirements of the Hungarian VAT Act, must be supplied to the tax authority. As a result, the invoices issued for domestic or foreign natural persons, legal persons or organisations not subject to VAT as well as for not domestic persons subject to VAT are affected by the obligation of invoice data supply from 4 January 2021.

Court of Justice of the European Union (CJEU) established that for bad debt relief limitation period must begin to run not from the date of performance of the payment obligation initially provided for, but from the date on which the debt became definitively irrecoverable.

Products imported from and exported to the UK became subject to customs duties as the UK withdrew from the European Union on 1 February 2020 and also left the EU customs union on 1 January 2021.

Hungarian National Tax and Customs Authority regularly publishes the list of major tax defaulters for failing to fulfil their tax obligations in Hungary. The list also contains private data of the defaulters, including, inter alia, information on tax arrears and debts and their home address. In a recent case (L.B. v. Hungary – 36345/16), European Court of Human Rights concluded no violation and confirmed the approach of Hungarian tax authority as justified.