Hungary introduces 2nd round of economic measures in response to coronavirus outbreak


Hungarian Prime Minister Viktor Orbán announced the implementation of a second economic package on Monday, 23 March 2020 to mitigate the adverse impact of the coronavirus outbreak on the economy.

The economic package includes limitations on enforcement, further tax breaks for the most affected sectors and prolongation of expiring maternity benefits.

Enforcement relief

The government is suspending certain enforcement measures during the state of emergency connected to the coronavirus epidemic, but the measures will continue to be carried out beginning 16 days after the state of emergency expires.

Bailiff activities will be limited during this time and bailiffs’ offices will be closed for in-person meetings. Bailiffs will not service enforcement documents, which will be delivered by post or by electronic means in accordance with the rules governing electronic communications. Information on on-going cases can be provided via telecommunications upon appropriate identification.

On-site procedures and traditional auctions for properties cannot be held during this period and enforcement of specific acts (i.e. performance of a specific act or conduct, forbearance or discontinuance) is also suspended. Deadlines relating to the enforcement of specific acts will also restart on the 16th day after the state of emergency expires.

In order to ease pressure on debtors, bailiff enforcement measures are suspended on claims, rights and real estate that were seized both within the framework of administrative enforcement and court enforcement procedures. However, reliefs are exclusive to court enforcement procedures, rules governing administrative enforcement procedures are not changed.

In addition to the above, courts are now allowed to suspend enforcement procedures against a debtor if his “life situation” was harmed by measures implemented during the pandemic.

Extended tax breaks

To provide general relief for all companies, tax enforcement procedures in progress as of 24 March 2020 are suspended until 16 days after the state of emergency has ended. The legislation, however, does not seem to contain any relief from tax enforcement procedures that would start after March 24.

The list of industries considered to be hardest hit by the outbreak has been extended, fine-tuned and is now defined according to the NACE 2 classification system of activities recognised across the EU. The amended list of “endangered activities” now includes: 

  • Taxi operation
  • Accommodation
    Food and beverage service activities
  • Creative, arts and entertainment activities
  • Sports activities and amusement and recreation activities
  • Gambling and betting activities
  • Motion picture, video and television programme production, sound recording and music publishing activities
  • Organisation of conventions and trade shows
  • Publishing of newspapers
  • Publishing of journals and periodicals
  • Programming and broadcasting activities

For the period between March and June 2020 inclusively, employers and entrepreneurs under the general tax scheme operating primarily in these endangered sectors (i.e. the majority, and at least 30% of sales revenues realised from these sectors) are entitled to the following benefits:

  • exemption from paying social security taxes for employees and for the personal activities of entrepreneurs. Training contributions are also exempted and the annual rehabilitation contribution liability is proportionally decreased to exclude these months.
  • social security contributions payable by employees and entrepreneurs are reduced to 4% healthcare contribution payable for healthcare services and cannot exceed HUF 7,710 a month.

KIVA taxpayers in the endangered sectors are also released from their obligation to pay KIVA on payroll payments made to individuals contributing to their activity.

A separate endangered activities list has been enacted for small taxpayers under the KATA flat rate scheme. This list is similar to the above, but also includes healthcare services, various construction and repair services and beauty parlours. KATA taxpayers operating in these areas are relived from their KATA payment obligations. Any outstanding tax liability by KATA taxpayers may be settled in ten equal instalments after the state of emergency has ended.

The exemption from the 4% tourism contribution has been reiterated with further guidance on the procedural rules to be followed.

These measures were introduced through Government Decrees No. 57-61/2020. (III. 23.).

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