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In accordance with its latest announcement, Hungarian Government decided to temporarily decrease the excise duty imposed on fuel products as of 10 March 2022. Other governments in the region also introduced similar measures to control fuel prices and thus inflation; compliance with the EU rules, however, might be of secondary importance.

The European Commission has revised the regulations of the net short position reporting and published rules to permanently lower the initial net short position reporting threshold from 0.2% to 0.1% under the EU Short Selling Regulation (SSR). The new threshold took effect on 31 January 2022.

As technology plays an ever-growing part in our lives, lawmakers, as well as high-tech companies have to deal with the problem of inheritance of these digital assets. The importance of these assets is demonstrated by the fact that according to notaries, they became part of succession in an increasing number. One has to pay attention to the inheritance of these accounts, since it can easily happen that heirs will not be able to access for example the deceased persons' cryptocurrency account.

The amendment to the Government Decree on the energy performance of buildings, in force from 1 January 2022, requires parking spaces in existing buildings, new buildings or buildings undergoing major renovation (including the electrical infrastructure of the building) to be equipped with an electric car charger or to have an electrical connection facility to enable the charger to be installed at a later date.

The act on the Enforcement of Material Compensation for Delay in Civil Proceedings entered into force on 1 January 2022. In the past decades, the European Court of Human Rights has repeatedly indicated that the Hungarian legal system does not provide a domestic remedy which is considered effective by the Court and would serve to prevent the delay of court proceedings or to remedy the damage caused by such proceedings. In its judgment in Gazsó v. Hungary, the European Court of Human Rights called on Hungary to establish a domestic remedy capable to handle the structural deficiencies identified in the judgment. As a result, the Act establishes a new legal remedy for compensation for violation of fundamental rights, called material compensation (in Hungarian: “vagyoni elégtétel”).

In its recent decision issued on 27 January 2022, the Constitutional Court annulled an important rule of the Tax Procedure Act with regards the prolongation of limitation period. The decision is fundamentally beneficial for taxpayers, but also triggers some uncertainty for repeated proceedings going forward.

In the past years, several new EU Member States have started investigations regarding the quality of products. Investigations showed that in many cases products have more detailed descriptions attached, or simply have more active substance if they are sold in the Western Member States than in the Central and Eastern European Member States. It was suspected for a long time that there are quality differences between the same products, sold in the same packaging but in different countries.

On 14 December 2021 certain acts of agricultural subject were amended by the Hungarian Parliament, affecting inter alia the Act on Protection, Management of Wildlife and Hunting, the Forest Act, the Act on Transactions in Agricultural and Forestry Land (Land Transactions Act) and the Act on the Termination of the Undivided Joint Ownership on lands.

Several modifications of the company rules in the Hungarian Civil Code entered into force with effect of 1 January 2022. One of the most important changes is that the rules on additional payment (in Hungarian: “potbefizetes”), which were applicable only for limited liability companies, have been transferred to the common rules of companies, resulting in that the possibility to require additional payment from the members is available also for general partnerships, limited partnerships and private limited companies.

At the beginning of November 2021, a bill was submitted to the Hungarian Parliament on the temporary provisions relating to the new Land Registry Act and on the amendment of certain acts of cultural subject and relating to the land registry, spatial planning (in Hungarian: “teruletrendezes”) and urban planning (in Hungarian: “telepulesrendezes”).

In order to respond quickly to the challenges caused by the pandemic in the workplaces, the Hungarian Government introduced temporary regulation on teleworking in 2020. Since these provisions are applicable only during the state of emergency, the modification of the Labour Code and the Act on Safety at Work are on agenda with the aim of clarifying the provisions on teleworking on a permanent basis. The proposed modification is in line with the rules on teleworking specified in the Government decrees currently in force.

Mihály Varga, Minister of Finance of Hungary has introduced many changes in tax legislation as of 1 January 2022 with an estimated HUF 750 billion to be left at the private sector. According to the statement of the Minister, tax reductions became achievable, as the economic growth of Hungary rose over 6,1%.

In 2018, the Hungarian Constitutional Court established in its decision that there was an infringement of the Fundamental Law by omission in connection with the entry into force of the amendment of certain acts relating to land-compensation. The issue was that the legislator abolished the rules on the auctions of agricultural land, so that the beneficiaries still had the purchase right serving the assertion of the compensation claim. The Constitutional Court called on the Parliament to fulfil its legislative duties by 31 December 2018.

The Hungarian State unlawfully collected a sizeable amount of VAT from pharmaceutical companies ruled the European Court of Justice (ECJ) in a recent preliminary ruling procedure, initiated by Boehringer Ingelheim against the Hungarian tax authority.

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.

KCG Partners at a Glance

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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