Changes In Tax Return & Payment Deadlines, Employment In Hungary

  • 28 Apr 2020 3:39 PM
Changes In Tax Return & Payment Deadlines, Employment In Hungary
Pursuant to the provisions of Government Decree No. 140/2020 (IV.21.) the deadline for the assessment, return and payment of the annual and special taxes below and that for the assessment of the tax advance is now 30.09.2020 (instead of the original deadline of 31.05.2020): corporate tax (TAO), small business tax (KIVA), local business tax (HIPA), energy suppliers’ income tax (EJA), innovation contribution.

The tax and contribution advances that become due until 30.09.2020 must be paid considering the advance determined in the last available advance return.

A reduction can be requested if according to the calculations of the taxpayer the annual tax or contribution does not reach the amount of the advance.   The annual reports must also be submitted until 30.09.2020 (instead of 31.05.2020).

This does not apply to the businesses trading with securities accepted for trade in the regulated market (stock exchange) of any Member State of the EEA, and those that are considered by the law as “public interest entities”.  

The framework amount of the SZÉP cards has increased. Accordingly, the following are considered fringe benefits:
- the allocation transferred to the accommodation subaccount is up to HUF 400,000 per year,
- the allocation transferred to the hospitality subaccount is up to HUF 265, 000 per year,
- the allocation transferred to the leisure subaccount is up to HUF 135, 000 per year.

The annual recreational framework amount for budgetary organizations is now HUF 400,000/year, and in case of other employers it is HUF 800,000/year.

The fringe benefits transferred to a SZÉP card account between 22.04.2020 and 30.06.2020 are not subject to social contribution tax, and in case of KIVA subjects nor are they subject to KIVA, so a personal income of only 15% has to be paid on them during this period.  

The taxpayer subject to tax on tourism does not have to pay the tax on a guest-night spent in the period between 26.04.2020 and 31 December 2020, and the persons obliged to collect the tax do not have to collect and pay it.

However, the tax assessed but not collected has to be declared to the national tax administration. The assessed tax does not have to be declared if its amount is zero.

Until the 30th day following the end of the state of danger, the EKAER (Electronic Trade and Transport Control System) risk guarantee does not have to be submitted.

The NTCA will ex officio transfer the already submitted risk guarantee back to the taxpayer.

The licenses relating to road section exemptions continue to be valid throughout the period of state of danger, and the fulfillment of the conditions is not examined during the state of danger.

The ‘reliable taxpayer’ rating will not cease due to the infringement of any tax liability due during the period of state of danger or within 30 days after its end, with reference to the tax differential established to the taxpayer’s disadvantage, nor will it cease if the tax debt exceeds net HUF 500,000 or the tax performance is not positive (or loss-making). 

A maximum 6 months’ deferral of payment free of additional charges or a maximum 12’ months payment in installments free of additional charges will be authorized not more than once for a tax debt of maximum HUF 5 million if the applicant proves or presumes that the payment difficulty results from the state of danger. The application is exempt from duty and assessed within 15 days.  

Based on an application submitted until 30th day following the end of the state of danger a non-natural person taxpayer and an individual liable for payment of tax may request not more than once the reduction of a tax debt of up to 5 million HUF by a maximum of 20 %.

The tax reduction can be requested for only one tax category. Reduction can take place only if the payment of the tax debt would make the applicant’s economic activity impossible for a reason attributable to the state of danger.

If the applicant receives the tax reduction, they will no longer be eligible to deferral of payment or payment in installments. This application is exempt from duty and assessed within 15 days.  

Those concerned must have supervision of cash registers and vending machines carried out within 120 days after the end of the state of danger if the deadline expires during the period of state of danger.  

During the period of state of danger any employee on unpaid leave due to the state of danger is entitled to health care service. In case of such workers the employer is obliged to pay a health care service contribution of HUF 7,710/month from 01.05.2020, which must be included in the contribution return.

(Upon the employer’s request, the NTCA authorizes the deferral of the payment of contribution until the 60th day following the end of the state of danger.)  

From 01.07.2020 the rate of the social contribution tax will be 15.5 % (instead of the former 17.5%).  

If a private individual is liable for the payment of social contribution tax (except if it is accountable as a cost or was reimbursed to him/her), then from 01.07.2020 87% of the assessed income (instead of the former 85%) must be considered as income in terms of both social contribution tax and personal income tax.

(This was subject to change due to the reduced rate of social contribution tax.)

From 01.07.2020, the paying agent will assess and deduct EKHO of 15.5 percent (instead of the former 9.5%) from the revenue underlying the private individuals’ simplified contribution to public revenues (EKHO).  

From 01.07.2020 the basis of benefits for persons under KATA (small taxpayers) will be HUF 102,000/month in case a monthly KATA payment of HUF 50,000, and HUF 170,000/month in case of a monthly KATA payment of HUF 75,000 (up to now this basis was HUF 98,100/month, and HUF 164,000/month, respectively). 

From 01.01.2021 the rate of KIVA small business tax will decrease to 11% (from the current 12%).

Reliefs and subsidies relating to employment

Reduced time employment: From 29.04.2020 the concept of reduced working time is as follows: pursuant to the labour contract amended after the announcement of the state of danger part-time work reaching at least 25%, but not exceeding 85% of the working time under the work contract prior to the amendment on a three months’ average is considered reduced working time (it was 50 and 70% up to now), and the working time can now be less than 4 hours.

(Therefore, in case of an 8-hour labour contract part-time can be between 2 and 6.8 hours per day, i.e. 10 and 34 hours per week.)

The obligation to maintain headcount was alleviated (it is now sufficient to maintain the employment relationship of the workers with whom the employer submitted a joint application for subsidy), and the rules relating to overtime were also relaxed (it is only subsidized employees for whom overtime work cannot be ordered).

Individual development time: in order to ensure development relating to the job of the employee or the activity of the employer, the employee is exempted from the performance of the obligation to work during the period of subsidy or within 2 years after that to an extent equivalent to 30% of the working time lost due to the reduction of working time (up to now, the text only included the word “exempted”.

Employment can also take place by remote working and working from home.

The concept of absence fee has been deleted from the decree, instead, the concept of base wage has been defined as follows: base wage is the base wage effective on the date of submission of the application, as a part of which, service charge must also be considered.

Therefore, during the period of subsidy, the wage in combination with the subsidy has to reach the employee’s base wage, and it is also the base wage that will be considered instead of the absence fee when determining the monthly sum of the subsidy.

The decree now includes that such subsidy may not be requested for employees after whom a tax allowance for the employment of researchers-developers is disbursed.

The rate of the subsidy is 70 % of the part of the amount of the base wage, reduced by personal income tax advance and contributions determined as per the general rules, proportionate to the lost working time (the designation of lost working time at a rate of 30, 40, 50% has been removed, i.e. the subsidy can now be requested for people employed in e.g. 6 hours as well).

No agreement must be made on individual development time if the reduced working time is less than half of the original working time, e.g. the daily working time is reduced from 8 hours to 3 hours (but an agreement can be made in this case as well. If it is obligatory to agree on an individual development time, wage will still have to be paid for that.

The subsidy determined for the applications submitted simultaneously in terms of the same place of business may be applicable for the same period.

Based on the decision-making of the government office, the labour contract will be amended in terms of reduced working time and individual development time for the subsidized period in accordance with the content of the application, except if the parties already amended the labour contract prior to the submission of the application.

Click here to visit Colling Accounting online
1134 Budapest, Váci út 49. DC Office Building, I. floor
Tel:  +36 1 452 69 00

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