Summary of the Labour and Tax law restrictive measures in Hungary – November | News Flash

Employment law

1. The shops, with the exception of pharmacies and petrol stations, can stay open until 7 pm and then open when the curfew expires, meaning at 5 am at the earliest. Service providers and services not covered by the decree (such as hairdressers, masseurs, personal trainers) may operate normally in accordance with the rules of the curfew.

Everyone is obliged to wear a mask that constantly covers their nose and mouth during working and shopping as a guest in the shop.

2. The operator must ensure that people staying in the business premises wear the mask properly.

A person who does not wear the mask as prescribed above shall leave the premises. The operator shall make sure that such person leaves the business area.3. Everyone is obliged to be at their place of residence, habitual abode or accommodation between 8 pm and 5 am, except (certified by written evidence) in case of

• working
• journey between the place of residence, habitual abode or accommodation and the place of work

4. Shop must be closed between 7 pm and 5 am. Presence is forbidden between 7 pm and 5 am, except for the employees.

5. The shop, the operator and the shopkeeper must ensure the effective enforcement of the protection measures.

6. Commercial activity (out of premises) with the purpose of supplying the population can be carried out without notification, under the agreement concluded with catering company or with FMCG trader. This activity can be carried out by the catering company or FMCG trader itself.

7. If the controlling authority becomes aware of a breach of the abovementioned obligations, it may impose a fine of HUF 100,000 to HUF 1,000,000, and may temporarily close the business premise, area, institution or site for a period of at least one day and a maximum of one year – it may use both means.

The fine may be applied in multiple times on the same day.

The abovementioned legal consequences do not apply, if the operator or the operator’s employee has taken the necessary measures in order to make the illegal situation end, in particular

1. if they called on the infringer to leave, and
2. after the infringer ignores the notice, they notified the police

8. Distance work: During the period of the emergency, Labour safety rules pertaining to distance work shall not apply.

In case of distance work, the employer informs the employee about the rules of necessary working conditions that save health and safety, and the employee is entitled to choose the place of work in accordance with these working conditions.

Tax reliefs

Personal Income tax

During the period of emergency,

• the amount agreed in advance by the parties, but does not exceed 10 per cent of the minimum monthly wage valid on the first day of the tax year (if the distance work does not cover the whole month, part of the monthly amount in proportion to the number of days involved in distance work)
• from the sum paid as a reimbursement related to the distance work,
• to the employee performing distance work under his/her employment contract,

shall be considered as cost deductible, if the individual does not claim any other costs (stipulated in Act on PIT) regarding the distance work.

Social Contribution Tax

The payer performing a supported main activity shall be exempted from social contribution tax for the month of November with regard to natural person employees.

Vocational Training Contribution

The payer performing a supported main activity shall be exempted from vocational training contribution for the month of November.

Rehabilitation contribution

The payer performing a supported main activity shall be exempted from rehabilitation contribution and any other advances in 2020.

Small Business Tax

Staff costs occurred in November does not constitute tax base

Supported main activity shall be the activity which forms the major part of the incomes of the payer or the small business taxpayer in the six months preceding date of entry of the government decree, but at least 30% of his/her income.

Beneficiary activities: Restaurant, mobile hospitality; Event catering; Beverage services; Film screening; Arranging of conferences, trade shows; Sports and leisure training; Performing arts and ancillary activities; Operation of art facilities; Museum activities; Plant and zoo operation; Operation of a sports facility; Sports association activities; Exercise services; Other sporting activities; Amusement park activities; Physical wellness services; Other entertainment, leisure activities.

The condition of claiming the benefits is that the payer fulfils the obligation to pay wages under an employment contract already in force at the time when the Decree entered into force and does not terminate employment contracts by dismissal in November 2020 pursuant to the Labour Code.

The precondition of the benefit is that:

1. the payer would have dismissed the employee due to the emergency,
2. the payer declares his claim for exemption to the tax authorities.

Wage subsidy

Eligibility: same as the supported activities indicated in the tax reliefs

Employer may be eligible for an allowance equal to 50% of the gross wage of the employee, if

1. the employee has an employment relationship on the last day of the benefit period, and
2. the employer pays the employee wages.

The allowance can be granted only for the month of November 2020. The allowance or the pro rata allowance will be paid to the employer in arrears.

Gábor Kertész

Head of Advisory | Accace Hungary

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