Extraordinary steps to mitigate the economic damage caused by the coronavirus epidemic

Main elements of the first economic package announced in relation to the coronavirus in Hungary

• Introduction of a full moratorium on loan payments (for individuals, companies and all debtors) until 31 December 2020.
• Introduction of a central bank base rate plus 5 percent APR cap for consumer loans (non-mortgage loans).
• Ban on termination of lease contracts concluded with sectors concerned by 30 June 2020.
• In certain sectors (tourism, hospitality, entertainment, gambling, film, performing arts, event organizing, sports),between the period of March-June 2020, the employer is exempt from payment of public contributions on the wages of employees.  Also, employees are only obliged to pay 4 percent health insurance contribution in kind of up to HUF 7.710 in addition to the personal income tax.
• The tourism development contribution does not have to be paid, declared or determined in the course of the March-June 2020 period. 
• Taxi drivers are exempt from the small taxpayers’ itemized lump sum tax (“KATA”) payment liabilty for a 4-month period (March-June 2020).
• The Labour Code has been amended, teleworking, working from home can be ordered unilaterally, the work schedule can be modified more flexibly, health surveillance of the employee can be carried out by the employer.

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Payroll changes - the picture will soon clear

In order to be able to apply the changes prescribed by the Government Decree no. 47/2020, payroll programmes and practices should be modified. Public charges exempted as a benefit, i.e. not to be transferred, will not be included in the payroll, no returns to be submitted to the NAV during this period of time and certain contributions temporarily exempted will not be transferred.

In the sectors concerned,  only 4 percent health insurance contribution in kind, which has been capped at HUF 7.710, and 15 percent personal income tax (“szja”) are payable in addition to the employee's net wage payment.

The employee part is not to be paid temporarily by the end of June:

• 10 percent pension contribution,
• 1.5 percent labour market contributions,
• 3 percent cash health insurance contributions (or the part of health insurance contribution in kind exceeding HUF 7.710)

Employer's contributions are temporarily not to be paid in the sectors concerned i.e.:

• 17.5 percent social contribution tax (“szocho”),
• 1.5 percent vocational training contribution.

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