Tax Alert

Tax Alert

Detailed rules on tax reliefs to mitigate the economic effects of the coronavirus pandemic have been introduced in the framework of the Economic Protection Action Plan.


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This dispatch will outline the main provisions of the 140/2020. (IV. 21.) Government Decree below.

Reliefs in connection with the fulfilment of financial reporting obligations

  • The deadline for preparation, deposit, publication and submission of annual reports will be extended to 30 September 2020.
  • The above extension does not apply to the annual reports of public interest entities (e.g. banks, insurance companies, listed companies).

Reliefs in connection with the fulfilment of tax liabilities

  • In relation to taxes whose calculations are based upon data from an annual report (corporate income tax, Robin Hood tax, local business tax, innovation contribution, small business tax), it is sufficient to fulfil the submission and settlement obligation by 30 September 2020—even if the taxpayer is not entitled to postpone the above obligations in relation to their annual report.
  • In the above cases the taxpayer should calculate their tax advance liability on the basis of the tax advance liability determined in their last available tax advance return on the same schedule, it is to be settled by the applicable deadline.
  • In regard to corporate income tax, it is still possible to offer subsidies on film and team sport incentives based on such a tax advance liability determined in this way.
  • In addition, a taxpayer can request a reduction of the tax advance payment before the due date, if, according to its calculations, the tax liability for the tax year starting in 2020 does not meet or exceed the sum of the tax advance payment amounts.
  • Taxpayers are no longer required to assess tourism tax on overnight stays, from the effective date of the decree until 31 December 2020, nor does it need to be submitted or settled. However, the determined but uncollected tax liability has to be submitted to the Tax Authority. Moreover, no tax return should be filed if the amount is zero.

Social tax

  • As of 1 July 2020, the rate of social tax will be a flat 15.5% (instead of 17.5%).
  • Furthermore, as of 1 July 2020, when social tax is payable, borne by the individual and it is not refunded to him or her, the personal income and social tax base shall be 87% of income (an increase on the current 85%).

Fringe benefits

  • In 2020, payments transferred to the Széchenyi Card may be regarded as fringe benefits subject to the following thresholds:
    • maximum payment for the accommodation sub-account is HUF 400,000/annum;
    • maximum payment for the hospitality sub-account is HUF 265,000/annum;
    • maximum payment for the leisure sub-account is HUF 135,000/annum.
  • The absolute thresholds for fringe benefits have been also amended. For non-governmental employers, the following rules are applicable:
    • The maximum amount of the fringe benefit is HUF 800,000/annum;
    • A proportional amount has to be considered, if employment is terminated or established in the calendar year in question;
    • The maximum amount of the fringe benefit is HUF 800,000/annum, if employment is terminated due to an individual's death.
  • In addition to the above rules, no social tax is payable on payments transferred to the Széchenyi Card in the 22 April 2020 – 30 June 2020 period.

Healthcare service charge

  • Employees on unpaid leave due to the emergency situation are entitled to healthcare services. In such cases, the healthcare service charge (HUF 7,710/month) is payable by the employer instead of the individual.
  • Based on a request, the employer can still cover this liability within a 60-day period after the termination of the emergency situation.

State support

Support to employers in R&D

  • Changes have been implemented in the support provided to employers in the research and development (R&D) sector. The modification states that it is no longer necessary for employers to maintain employees’ average headcount determined in the month preceding the submission of a request.

Support provided to employees

  • The latest government regulation introduces multiple modifications to the original one as well. The main amendments are as follows:
    • The support may be applicable for 25-85% part-time employment.
    • The following points are no longer conditions of the support:
      • “The employer shall introduce the economic reasons behind applying reduced working hours, a direct and strong correlation between that rationale and the economic issue due to the pandemic; and the implemented and prospective measures to counter economic difficulties.”
      • “The employer has exercised all work-time allocation possibilities to the date of submitting the request as defined by another regulation.”
      • “The applicable time frame cannot be applied later on due to its requirements as defined by another regulation.”
    • The support can be applied for labour lending.
    • Under a workforce retention obligation, a liability shall be meant based on which the employer has to maintain the employment of an employee, who is jointly submitting the request for support. Previously, it referred to an obligation to retain the statistical headcount.
  • Other rules have to be applied for the level of support:
    • The amount of support has to be determined by considering the original base salary (instead of the absence fee). The subsidy is equivalent to 70% of the monthly base salary reduced by the mandatory personal income tax and by the employee portion of the social security contribution. Calculation of the subsidy shall be prorated by taking the level of working time reduction into account.
    • Employers are still obliged to pay for professional development time. Professional development time must be considered if the level of working time reduction exceeds 50%. Otherwise, applying professional development time remains an option.
    • The aggregated amount of income provided by the employer plus the subsidy must achieve the amount of the original base salary.

Tax administration rules:

  • Based on the classification made during and after the state of emergency, a taxpayer's “reliable taxpayer” status cannot be revoked due to a breach of tax liability due during the state of emergency, or within 30 days thereafter, by reference to the tax difference or to an execution procedure.
  • In addition to existing payment allowances, upon request of the taxpayer to be submitted up until the 30th day after the end of the state of emergency, the Tax Authority grants a one-time payment extension of 6 months for tax payments not exceeding HUF 5 million registered with the Tax Authority, or instalment payments up to 12 months (in both cases without charging any late payment interest). Concurrent with filing the application, the taxpayer needs to prove or show the likelihood that the payment difficulty has been caused by the state of emergency. The application for these reliefs is free of charge, and the administration deadline is 15 days.
  • The rules of tax reduction are supplemented in a way that upon request of any corporate taxpayer the Tax Authority waives a maximum 20% of an existing tax debt, only once, and the amount waived cannot exceed HUF 5 million. The request can be submitted up to the 30th day after the end of the state of emergency. The only condition is that the payment of the tax debt would make the applicant's economic activity unfeasible, for a reason attributable to the state of emergency. The tax reduction can be requested in respect of only one tax type and it cannot be combined with other payment allowances. The procedure is free of charge, and the administration deadline is 15 days.


  • Taxpayers are exempted from providing a risk security until the 30th day following the period of emergency. Accordingly, previously paid securities are also returned to taxpayers involved in the transportation of risky products: the Tax Authority arranges the immediate reimbursement of any amounts available on the deposit account, as well providing their contribution to the financial institution necessary for the termination of guarantee without a request submitted by the taxpayer.
  • Road section exemptions, which can be requested for one year, are valid for the entire period of the emergency; furthermore, meeting the necessary conditions for the exemption does not have to be verified during this period.

Online cash registers, food vending machines

  • It is sufficient to carry out the annual software review and on-site service examination of online cash registers, as well as the annual review of food vending machines, within 120 days of the end of the emergency.

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