1. Suspension of enforcements

In certain cases, life situations and circumstances which temporarily suspend the collection proceedings override the public interest in the immediate recovery of tax and public debts based on an enforcement order.

According to the new law which came into effect yesterday, enforcement proceedings of the tax authorities are suspended until the 15th day after the end of the emergency caused by the coronavirus, which means that the tax authority may not take any further enforcement action

The suspension does not have any effect on the legality of the enforcement action, but of course the subsequent action won’t take place.

According to the Government decree, all debt collections that were not completed until the 1st day of the suspension should be revoked, and if during the suspension the tax authority receives payment related to previously started enforcement, it must be repaid within 8 days. These rules are applicable also for salary garnishments.

The limitation period of right for enforcement rests until the 15th day following the end of the emergency, which means that the rest period is excluded from the limitation period.

2. Maternity allowances

According to the published Government decree entitlements for social security and family support benefits is prolonged until the end of the emergency, so the right for childcare allowance (GYED), childcare aid (GYES) and family support benefit (GYET) shall be deemed to continue to exist.  These benefits are continuously paid for calendar days during the period of emergency, unless both parents of the child living in the same household have agreed in writing that the grandparent will claim the childcare allowance.

3. Decrease of employer and employee burdens

Details of the previously announced regulations can be found in the gazette issued yesterday. Previous decisions have been made to reduce the burden on employers and employees in the most affected sectors. No social security contribution is payable in respect of employment of a private person employed, self-employed and corporate entrepreneurs. There is also no obligation to pay labour contribution. The affected sectors are entitled to discount on rehabilitation contribution: they do not have to pay advances during the year and the contribution amount is also reduced to two-third of the original liability.

Employee contributions are to be performed in such a way that only the 4% in-kind health insurance contribution is payable, but maximum in the amount of HUF 7,710.

The above rules are applicable to tax and contribution obligations of March, April, May and June 2020.

Release of the contributions doesn’t have any effect on the entitlement of the employees for social security and labour benefits and on the amount of these allowances.

Burdens of companies operating in the affected sectors that are subject to small business taxation (KIVA) will be decreased as well. Since they are not obliged to pay social security and labour contributions, the personal related expenses can be excluded from small business tax base in March, April, May and June 2020.

No tourism development contribution is payable in March, May and June 2020 for taxpayers subject to this contribution.

Which are the affected sectors?

Companies operating in the affected sectors are those who have the following main business activity:

  • passenger transport by taxi (activity codes – TEÁOR and TESZOR – 49.32),
  • accommodation services (activity codes – TEÁOR and TESZOR – 55),
  • hospitality (activity codes – TEÁOR and TESZOR – 56),
  • creator, art and entertainment activities (activity codes – TEÁOR and TESZOR – 90),
  • sports, entertainment and leisure activities (activity codes – TEÁOR and TESZOR – 93),
  • gambling, betting activities (activity codes – TEÁOR and TESZOR – 92),
  • Production of films, videos, television programs, sound recording publishing (activity codes – TEÁOR and TESZOR – 59),
  • organization of conferences, trade shows (activity codes – TEÁOR and TESZOR – 82.30),
  • newspaper publishing (activity codes – TEÁOR and TESZOR – 58.13),
  • publishing of magazines and journals (activity codes – TEÁOR and TESZOR – 58.14)
  • programming, broadcasting (activity codes – TEÁOR and TESZOR – 60).

The decreased contribution payment liability therefore concerns companies whose actual main activity is the same as one of the activities above, which means that in the preceding six months most of the revenues, but at least 30% of the total revenue was generated from that activity.

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