Application of the measures of the economic protection action plan after the end of the emergency situation in Hungary

Dear Clients! Dear Readers!

Under the Act LVII of 2020 the declared emergency situation due to the coronavirus pandemic ceased on 18 June 2020.

In this newsletter it will be summarized how long the elements of the economic protection action plan will be in force and whether certain measures will be removed after the end of the emergency situation or will continue to apply/may be applied.

1. Conditions for claiming wage subsidies

• Wage subsidies for research and development employees

Until 18.07.2020 (until the 30th day after the end of the emergency situation), the subsidy can still be applied for on a form available on the website of the National Employment Service.

• Wage subsidy in case of reduced working hours

The final deadline for submitting the applications is 31 August 2020.
The final deadline for the payment of the subsidy is 31 December 2020.

2. Special retail tax

The special tax on companies engaged in retail activities was not only in force during the emergency but is integrated into the tax system. The rules for tax assessment and payment are detailed in a separate newsletter.

3. Request for deferral and instalment payment

• Until 18 July 2020 (until the 30th day after the end of the emergency), a six-month surcharge-free deferral or a 12-month surcharge-free instalment payment can be applied for a tax of maximum HUF 5 million on one occasion.
• At the request of a non-natural person taxpayer and a person liable to pay the tax filed until 18. 07. 2020 (until the 30th day after the end of the emergency) the tax debt charged to him can be reduced once, by a maximum of twenty percent, but not exceeding HUF five million if the payment of the tax debt should make the applicant's economic activity impossible for a reason attributable to the emergency.

4. The taxpayer rating is retained

The reliable taxpayer rating will be maintained until 18.07.2020 (until the 30th day after the end of the emergency) even if during this period enforcement proceedings are initiated against the company or it fails to meet the conditions regarding the tax debt of a maximum HUF 500,000 or those of the so-called positive tax performance or a tax difference is established against him for breaching the obligations due during that period.

5. Exemption from Small Business Lump-Sum Tax (KATA)- for exempted activities

For March, April, May and June 2020, no itemized tax had to be paid by those small business taxpayers, who already paid it in February 2020 for their exempt activities. The companies concerned first will have to pay the tax for July 2020 until 12 August 2020.

If the entrepreneur is unable to carry out his activities in the coming period either, then he has the option to discontinue his business from July, which he can report until June 30th.

6. Concessions for vulnerable sectors

Social contribution, vocational training contribution, rehabilitation contribution and small business tax benefits for vulnerable sectors were applicable to tax and contribution obligations for March, April, May and June 2020. From July 2020, the pre-emergency rules must be followed.

7. Széchenyi Recreation Card

As of 22 April 2020 the employer may transfer the following higher amounts of benefits to each of the employees' sub-accounts

• for accommodation at the most HUF 400 thousand a year instead of 225 thousand,
• for catering service instead of HUF 150 thousand a maximum of HUF 265 thousand a year,
• for leisure services instead of HUF 75 thousand, HUF 135 thousand per year at the most.

Fringe benefits granted by the employer and transferred to employees' Széchenyi Recreation Card accounts between 22 April 2020 and 31 December 2020 are not subject to social contribution tax.

8. Postponement of annual returns and tax payment deadlines

Annual corporate tax due between April 22, and September 30, 2020, KIVA (small business tax), business tax and innovation contribution reporting and payment obligations must be met uniformly by 30 September. The deferral also applies to advance declarations due during this period. If the taxpayer makes use of the deferral option, the tax advances to be paid from July 2020 on the basis of the advance payment obligation set out in the last available advance return shall be established on the same schedule and paid by the deadline applicable to it.

In the case of local taxes, tax exemption declarations and applications for advance reductions can also be submitted until 30 September.

9. Postponement of reporting deadline

The accounts can be prepared and submitted by 30 September.

10. Development reserve in corporate tax

A measure to facilitate previous investments in the event of an emergency, according to which the development reserve can be formed up to the full amount of the pre-tax profit remains in force.

Thus, the pre-tax profit is reduced by the amount transferred to the reserve in the tax year and shown as a reserve on the last day of the tax year. but at most the amount of pre-tax profit and at most HUF 10 billion per tax year. The 50% previous limit has been removed from the law.

Taxpayers may choose to enforce the development reserve until 30 September 2020 by self-auditing the accounting report and corporate tax return for the 2019 tax year, up to the full amount of pre-tax profit.

11. EKAER

Until 18.07.2020, no risk insurance is required f.or risky shipments either.

12. Suspension of tourist tax

Tourist tax after a guest night spent between 26 April 2020 and 31 December 2020 shall not be collected and paid, but the established tax must be declared to the tax authority. If the amount of tax assessed is 0, no return is required.

13. Cash register inspection

It is also sufficient to carry out a mandatory inspection of cash registers and food vending machines by 16 October 2020 (within 120 days after the end of the emergency).

If you have any questions about tax issues related to the cessation of the emergency, please feel free to contact us.

Best regards:
ABT Treuhand Group