International Tax, Accounting and Law Firm in Hungary
Concessions concerning bank loans and taxes have been introduced as new measures by the Hungarian Government to support the economy.
Capital and interest payments on bank loans taken by businesses prior to 18 March 2020 are suspended until the December 31, 2020. These rules apply only to loans provided by credit institutes and include financial leasing agreements as well. If businesses wish to continue the repayment of their loans (capital and interest), they may wish to do so.
The terms of credit will be extended by the duration of the above moratorium and loans expiring during the term of the moratorium will be extended until December 31, 2020.
No. If one of the contracting parties is unable to fulfill its contractual obligations (ie. it is in breach of contract in civil law) but proves that the breach was beyond its control and unforeseeable at the time of the conclusion of the contract, then the defaulting party is not liable for potential damage. This is the so called force majeure rule of Hungarian Law, but it applies only to not being liable for damage caused by higher force.
For example, if a supplier is unable to deliver a product on time due to the epidemic, that might cause serious damage to customers. However, the supplier will not be liable for damages if it proves that event was beyond its control. The contract will remain valid unless delivery becomes completely impossible, in which case the contract will cease. An example for the latter is the impossibility of transportation as based on a transportation contract. If the owner of the goods entrusts another company with transportation after the first firm’s vehicle failed to arrive due to the virus emergency, then the contract will cease. The owner will not be entitled to demand damages from the first transportation company.
No. The tax reduction measures of the Government apply to certain sectors exclusively, leaving many corporate taxpayers unaffected. The tax cut is applicable only to businesses operating in the areas of tourism, hospitality, entertainment, gambling, film, performing, event organizing and sports.
The above industries are exempted from the payment of employers' contributions and workers' contributions are significantly reduced. Also, the leasing contracts for their rented premises cannot be terminated and the rent cannot be increased until June 30, 2020. Further temporary tax cuts have been introduced for small and very small businesses.
All natural and legal persons can benefit from the concessions concerning procedural rules. The submission deadline for yearly tax returns has been postponed to September 30, 2020.
Enforcement measures such as evictions and seizures as well as the collection of tax debt are suspended until the 15th day after the closure of the emergency. This rule also forbids court auctions and other on-site enforcement measures. Should the state of emergency continue until after the end of October, then evictions that would take place between 15th November 2020 and 30th April 2021 will be postponed.
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