Further tax reliefs in connection with the taxation of SZÉP card benefits in Hungary

Tax burden on SZÉP (Széchenyi recreation) card benefits changes until the 31^st of December 2020 according to the Hungarian Government decree nr. 225/ 2020. (V.22) published in Nr. 118 of the Hungarian Gazette.

No social security contribution is payable until the end of the year on the amounts transferred to SZÉP cards, which is taxed as in kind benefit, so this means that instead of the total 32.5% tax burden only the 15% personal income tax will be payable by the employers.

The coronavirus epidemic has already brought several positive changes in the handling of in-kind benefits.

According to the regulations effective from 22^nd of April, the yearly limits of in-kind benefits has been increased as follows:

• maximum 400 thousand HUF in case of transfers to accommodation sub-accounts,
• maximum of 265 thousand HUF in case of transfers to hospitality sub-accounts,
• maximum of 135 thousand HUF in case of transfers to leisure sub-accounts is considered as an in-kind benefit.

The recreational limit for the SZÉP card has been also increased, as we wrote in our previous article. Instead of the previous limit of yearly 450 thousand HUF the new limit is yearly 800 thousand HUF, in case of government institutions the new limit is 400 thousand HUF instead of the previous 200 thousand HUF.

However, there is no change in the handling of exceeding the above-mentioned limits: these transfers are considered as other defined benefits, which means that social security contribution remains payable.

From 1^st of July 2020 the rate of the social security contribution will decrease from 17.5% to 15.5%.

We continue to report on any changes that come into effect, it is worth following our blog. Read our related previous articles!