Hungarian entities and economy also faced with multiple unforeseeable challenges due to the COVID pandemic.
There were several measures and responses introduced by the Hungarian government under the period of the state of emergency. For example, as a financial support principal and interest payment liabilities on loans taken out before 18th March 2020 are suspended until the end of year 2020.
A new wage subsidy program was also set up in relation to reduced working hours or in relation to employment in R&D.
Hungary has introduced a retail surtax which was first published to be in force temporarily until the end of the state of emergency period, but after an amendment it will be a permanent tax applicable also after the COVID period. The tax is charged on traditional retail sales (foods, beverages, tobacco, books, toys, clothes, electrical household appliances, telecommunication equipment, sports equipment, furniture, cars, car parts, medicines, etc.) Foreign entities without permanent establishment in Hungary are also subject to the tax if they distance selling goods to Hungarian customers.
There is also an emergency legislation for legal entities, which simplifies decision making and provides relief to the entities to reserve operability during the COVID period without personal contact. Increased attention is needed to ensure that the legal entity operates in accordance with the law.
In connection with the COVID period new provisions were introduced on the extension of tax-related deadlines, due dates and financial reporting deadlines. Please consider that later issuance of the financial reports may cause uncertainty for market participants, the relevance of the information provided could be questionable.
Easing of lockdown has started in the past two weeks, hopefully the borders restrictions will also be eased soon, and the new life could begin.
Partner of Horizon Consulting in Hungary – Péter Viczkó