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.
Free Data Erasure
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.
Tax Audit Plan for 2021: E-commerce, Construction Sector, KATA Taxation and More in Focus
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.
Judgment of the Court of Justice on the Hungarian Advertisement Tax
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”).
Checking In: Data Protection Compliance in CEE
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?
No Rent for State and Municipal Properties Between 1 February and June 30
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:
New Legislation to Reduce the Competitive Disadvantage of Compliant Businesses
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.
Invoice Data Supply Without Sanctions until 31 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 Decides in Favour of Hungarian Taxpayers in Landmark Bad Debt Relief Case
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.
2021 Customs Regulations on the Import and Export Between the UK and Hungary
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.
European Court of Human Rights Approves of Hungarian Tax Defaulter List
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.
New Anti-Money Laundering Rules for Bookkeepers, Tax Advisors and Other Service Providers
At the beginning of February 2021, a new decree of the Hungarian Minister of Finance (“Decree”) was published on the detailed rules of the execution of the Money Laundering Act for certain non-financial service providers and the development and the minimum requirements of the operation of the filtering system. The decree enters into force on 19 March 2021.
Minimum Wage and Guaranteed Minimum Wage Increased from 1 February 2021
In the last decade, the amount of minimum wage and the guaranteed minimum wage has been rising year by year. However, the process of determining the minimum wage in 2021 was different from previous years in two ways: firstly, the agreement on the wage, after 7 negotiation sessions, was not reached by the end of December 2020, therefore, after reaching agreement at the end of January 2021, the new minimum wage figures are in effect from 1 February 2021, and secondly, the increase was lower as seen before in the last years.
New Regulation on Electronic Communication
The supervisory activity of the National Media and Infocommuncations Authority (“NMIA”) and the operation of communication service providers will be highly affected by the implemented provisions of the European Electronic Communications Code that prescribes the applicable new European framework of electronic communications.
E-commerce in the Focus of the Hungarian Competition Authority
According to a press release of the Hungarian Competition Authority (GVH) issued on 16 December 2020, GVH is launching a market analysis to investigate how customer datasets of e-commerce companies are created and also the role of such assets in the competition between online stores. The investigation will further cover the extent of the customers’ awareness of such data collection and its influence on their decisions.
KELER Received a CSDR Licence
In December 2020, KELER Kozponti Ertektar Zrt. (KELER Central Securities Depository Ltd.) (KELER), the central depository of Hungary, was granted an authorisation under the Central Securities Depositories Regulation (CSDR Regulation) and can now offer its clients services supporting an efficient and secure securities market as a central securities depository operating under unified European regulations.
Favourable Provisions for Builders Due to Pandemic
At the end of December 2020, several new regulations have been accepted to facilitate constructions due to the state of emergency. As one of the most important news, the Hungarian Government has extended the application of simple notification to the construction activities of a residential building including maximum six flats, but having a total net floor space of maximum 1,000 sqm.
Program to Help Construction Businesses Announced by the Government
The Hungarian Government announced at the end of 2020, that similarly to previous years, it will launch the fifth edition of the so called ‘EPITO’ (“Constructing”) program.