The Hungarian Parliament adopted a new act on 13 June 2023 on the employment of third-country nationals. The purpose of the new regulations is to provide a transparent and unified background for the employment of guest workers coming to Hungary from outside the EU. The new act does not affect the employment of EU nationals and citizens of Ukraine and Serbia in Hungary.

According to the legislation in force in Hungary, when entering into a sale or lease contract of a real property, the buyer or tenant must declare in the contract that he/she has received a document called energy performance certificate (“EPC”) which certifies the energy performance rating of the property and EPC’s unique identification number shall be included in the contract.

Although probation may be one of the most well-known legal institutes of the Labour Code and is a standard element of the employment agreements, the latest amendment of the Labour Code will make the parties pay more attention to their related statements.

From 1 July 2023, the interest income of natural persons will also be subject to a 13% social contribution tax. This means that - inter alia - interest on deposit accounts, together with personal income tax, will be subject to a total of 28% tax rate.

A recently published government bill plans to modify the Hungarian personal income tax law by abolishing significant tax advantages associated with Hungarian trusts in a short period of time.

A significant part of the provisions of the Government decree on the detailed rules of the operation of the extended producer responsibility system will enter into force on 1 July 2023, however, some provisions are already applicable from 1 April.

The Hungarian Government would designate additional areas of Budapest as immediate ‘Rust Belt’ areas, where the related development regulation will be applicable.

A new ruling of the Curia has finally settled the long-lasting debate on whether the general rules of civil law or the provisions of the Labour Code apply to the liability for damages of the employed managing director.

Significant changes are expected in the Hungarian tax system in the coming years, which could have a major impact on economic operators and individuals alike. As a result of the changes, the State is likely to lose significant revenues and the means to replace these revenues are not yet known.

At the beginning of May 2023, a new bill to amend certain laws to increase the competitiveness of the economy was submitted for public consultation. The bill proposes amendments to many laws, but the most important of these is the regulation of construction right in the Civil Code.

Contributed by KCG Partners.

From 1 January 2028, e-invoices will be mandatory for cross-border supplies of goods or services. with corresponding ‘near-real time’ reporting. The current maximum issuance requirement of 45 days post-taxable event is proposed to be shortened to just two days.

In a recently published judgment, the Curia ruled that a private e-mail address containing the full name of a natural person qualifies as personal data. However, the unlawful processing of personal data does not automatically constitute a violation of the right to the protection of personal data in the absence of other elements.

On 28 March 2023, the Curia established that certain provisions of the municipality decree of the 18th District of Budapest on local taxes are contrary to other legislation, and therefore annulled the provisions on air passenger tax with retroactive effect to 1 January 2023.

The specific connection procedure of power plants based on the requests of 2 May 2022 has been amended again, as a result of which deadlines set for authorized network operators are also amended. According to the government decree published on 29 March 2023, the new deadline to provide the technical and economic conditions for industrial-size power plants and electricity storage facilities as well as for all investments with a connection needed to a medium voltage network is 10 May 2023, while for the rest of the power plant investments it is 30 June 2023.

The European Court of Justice established in its ruling of 28 February 2023 that online platform OnlyFans is liable for value added tax (VAT) on the full amount paid by subscribers to content creators, not only on the 20% fee that the platform is charging creators of the sums paid by fans. This decision supports the position of the UK tax authority (HMRC) and further emphasizes the tax obligations of online platforms, regardless of their place of establishment.

A fast-track analysis by the Hungarian Competition Authority (GVH) has found that in many cases, companies' advertising communications suggesting sustainability are not backed up by easily accessible and relevant evidence for consumers. The result of the fast-track analyses was disclosed on 17 February 2023.

EU Directive 2019/1937 on the protection of persons who report infringements of EU law was adopted in 2019 and should have been transposed into national law by the Member States until 17 December 2021. The Directive obliges the Member States to set up a three-step notification system.