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In November 2021, a bill on the amendment of Act II of 2007 on the Entry and Stay of Third-Country Nationals in Hungary was accepted by the Parliament. The purpose of the modification is to create a new type of residence permit for “digital nomads” and it will enter into force on 1 January 2022.

At the end of October 2021, the Hungarian Government decided to take new protection measures to contain the fourth wave of the coronavirus outbreak, as a result, from 1 November 2021 employers have the right to require their employees to be mandatorily vaccinated. This means that to increase vaccination coverage and to protect workplaces, the Government allows employers to require their employees to be vaccinated against coronavirus as a condition of employment, either as a standard working condition for all employees or as an individual working condition depending on the job. For employees who have not yet been vaccinated, the employer may set a 45-day deadline for the first vaccination. Employers who require vaccination must inform the employee of the measure, the deadline and the possible legal consequences of not vaccinating, either electronically (in e-mail) or on paper. Furthermore, an employee who is medically certified as contra-indicated to be vaccinated against the coronavirus cannot expected to be vaccinated.

Immunisation Certificates played a big role in the previous wave of COVID-19 pandemic in Hungary. They were issued as a supplementary certificate to confirm that the cardholder had a positive COVID test or got at least the first shot of any of the available vaccines. At many stages of the pandemic, cardholders enjoyed specific privileges compared to the others (i.e. card was asked at many places that had an indoor room, such as theatres, cinemas, restaurants etc.). Even though the European COVID passport became available from 1 July 2021 among the EU, it is only issued for persons, who got an EU-approved vaccine. Since Hungary choose to vaccinate with non-EU-approved vaccines, the dichotomy of the certificates still remains.

On October 7, six leading labor lawyers in Hungary sat down for a virtual round table moderated by CEE Legal Matters Managing Editor Radu Cotarcea. The conversation focused on the current state of affairs of labor regulations in Hungary and their evolution over the pandemic-marked last few months.

The Hungarian judiciary system was facing with harsh critics in the past few years, especially in the field of digitalisation. However, the widespread of online meetings during the pandemic gave a boost to the digitalisation also in the courtroom. Even though the New Civil Procedure (entered into force 1 January 2018) and the New Criminal Procedure (entered into force 1 July 2018) provide for a long time the necessary institutional and technical conditions for online hearings, as well as for online witness testimonies, judges were reluctant to use them until last year, as it required more preparations and openness from their side.

From 2021, the rules on warranty for consumer durables (e.g. household appliances, kitchen appliances, gas appliances) have been comprehensively modernised. As a result of the changes, businesses must repair or replace defective products under warranty within a short period of time. In addition, the instrument for enforcing repair and replacement claims, i.e. the warranty certificate has also been affected by the amendments in September 2021. The Ministry of Innovation and Technology (ITM) created a warranty certificate template with a content agreed with trade associations to support the undertakings in their compliance.

The regional aid map is a legal provision that sets the maximum amount of state aid that can be granted as investment aid to companies investing in certain regions of the country, or in the case of developed regions, smaller territorial units.

A bill to exempt the minimum wage from personal income tax in order to reduce the tax burden on low wages was submitted to the Hungarian Parliament on 20 September 2021. The proposal aims to amend the Personal Income Tax Act. According to the preamble of the bill, the exemption is necessary, since the income of minimum wage earners is increasingly falling behind average earnings and the total tax burden on wages is one of the highest in Europe.

Hungary joins global minimum corporate tax agreement, as Mihály Varga, Finance Minister on Hungary announced on 8 October 2021. Mr. Varga highlighted three key points of the deal for Hungary.

The draft of a huge EU solar tender for the residential sector was published by the Hungarian Government at the end of August 2021. The draft proposal shows that households earning less than the national average income will be eligible for 100% non-repayable grants of between HUF 3-11.5 million (EUR 8,500 – 31,500) for green investment purposes.

The Curia has made a legal uniformity resolution no. 7/2021 PJE on the enforcement of the rules of contract transfer. The resolution has been trying to put an end to the issues of contract transfer, especially in the case of agricultural leases. The previous legal practice was based on the interpretation that the contract shall be deemed to be a new contract in respect of all rights and obligations transferred.

With respect to the evaluation of the success of the incorporation of certain provisions of the Hungarian Civil Code in the practice and the regulatory proposals developed by the case law, the amendment of the Civil Code has become necessary, therefore, at the end of June 2021, an act amending the Hungarian Civil Code has been published.

The European Commission approved the creation of a new synthetic securitisation product under the EU State aid regulation. The new product is in the form of guarantees on synthetic securitisation tranches to help companies affected by the COVID-19 outbreak in the 22 participating Member States (i.e. Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Lithuania, Luxemburg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain and Sweden). The product is under the European Guarantee Fund and managed by the European Investment Bank Group (EIB Group). The dedicated budget is EUR 1.4 billion, however, it is expected to mobilise at least EUR 13 billion of new lending to companies affected by the COVID-19 outbreak.

Legislation concerning remote work is once again in the spotlight, as Government Decree 487/2020. (XI. 11.) on the application of teleworking rules during the state of emergency modified the provisions of telework as of 3 July 2021. According to the Decree, home office should be considered as remote work during the state of emergency and the provisions of the Decree are applicable instead of the provisions of the Labour Code on remote work.

The provisions creating the legal framework of the Special Employee Stock Ownership Plan (“Special ESOP”) entered into force on 13 July 2021, providing a new special ownership opportunity for employees or board members of limited companies to acquire stocks at a more favourable rate than before.

According to a decision of the Court of Justice of the European Union made on 8 July 2021, Hungarian employees can make claims before the Hungarian courts against their Hungarian-based employer for breaching the minimum wage rules of the Member States where they are posted.

At the beginning of July 2021, a new Government Decree (402/2021. (VII. 8.)) entered into force on the registration procedure of raw materials and products with strategic importance for the security of supply in construction and on other measures. The aim is to control the purchase and export of certain building materials abroad from Hungary. It applies to building materials which are intended to be exported or to be sold abroad from the territory of Hungary, for instance gravel, pebbles, crushed stone, portland cement, bauxite cement, cinder cement, fireproof cements, mortars, concretes, iron bars and wood, however, it is not applicable to building materials supplied in the framework of transit traffic.

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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.

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