CLV Partners

Medium-sized companies

Changes in the enviromental taxes

The amendments of the Act No LXXXV. of 2011 on the environmental product tax. The regulation of the environmental product tax has been amended with effect from 2016. In this newsletter we would like to draw the attention to the main changes as follows:

1. Payment obligation of the environmental product tax:
a) Inventory purchase: According to the latest amendments to the act on the environmental product tax, the payment of the environmental product tax is mandatory not only in case of placing on the market or using for own purpose such products, but also in case of purchasing them for inventory, if the obliged person chooses the date of the purchasing for inventory as the date when his payment obligation arises, and he notifies the tax authority within 15 calendar days from the beginning of the activity or in case of continuous function until 31 of January of the current year, about his choice.

b) Packaging waste: The range of the obliged persons has also been extended. Thus, the person who puts the packaging material which has been produced abroad on the Hungarian market at the first time, and the first inland holder of the packaging waste formed from the unwrapped packaging, will be also obliged to pay the environmental product tax. The latter provision will be notable especially for logistic centres.

c) So-called triangle transactions: In accordance with the amendment, an obligation for paying environmental product tax does not arise in case of selling an environmental product to an inland purchaser, if after that the product will be delivered or dispatched abroad. The condition of this was previously that the seller himself had to deliver or dispatch the product.

2. Default surcharge:
The default surcharge has been implemented in the act as a new provision, which has to be calculated on the basis of the provisions of the act on the taxation in case of late payment or incomplete payment of the environmental product tax. Also, in case of undue use of budget supports a default surcharge has to be paid after the amount and period defined in the act.

3. Definitions:
The amendments affected the definitions of the act as well. Definitions such as packaging, commercial packaging, commercial packaging material, flat rate of product tax (among others) have been supplemented. Further, the range of the definitions has also been extended with the terms element of the packaging, component of the packaging, part of the packaging, packaging waste, building product,  motor vehicle, craft products, crafting activity, large industrial tool, deficit of the product tax, margin of the product tax, product tax debt, tariff heading.

4. Others:
Further to the above, the detailed rules regarding the flat rate of the product tax, the measure of the efficiency of waste management, product tax recovery and the product tax penalty have been clarified by the latest amendment.

Should you have any further questions in relation to the above, please feel free to contact us:

Dr. Marianna CSABAI and Dr. Réka SÜTŐ
H-1126 Budapest, Tartsay Vilmos u. 3.
Tel: + 36 1 488 7008
Fax: + 36 1 488 7009
E-mail:
 

 

News on adendment of information act with the effect form 1 October, 2015

The act CXII of 2011 on information self-determination and freedom of information („Information Act”) has been amended with the effect of 1 October, 2015.

The amendments provide new possibilities regarding the forwarding of personal data to third countries as it is possible for the datacontroller to provide adequate level of protection to forward the data to third countries with the preparation and application of binding corporate rules („BCR”). It is a significant change also in the light of the recent EU Court decision on the invalidity of the Safe Harbour agreement.

Moreover to the significant amendments above the provisions of Information Act regarding the rights of affected people are amended as well and the amount of fine give by NAIH is also amended as it can be twenty million forints at the highest (instead of the prior ten million forints).
 

Should you have any questions regarding the above, please feel free to contact us.
 
Dr. Marianna Csabai
H-1126 Budapest, Tartsay Vilmos u. 3.
Tel: + 36 1 488 7008
Fax: + 36 1 488 7009
E-mail:

On 1 November 2015 the new Hungarian Act CXLIII of 2015 on the Public Procurement has entered into force

The new Hungarian Act CXLIII of 2015 on the Public Procurement has entered into force. The new Act implements and harmonise the national public procurement rules with EU public procurement directives. To all public procurement initiated after 1 November 2015 the new rules shall be applied.

 

Should you have any questions regarding the above, please feel free to contact us.
Dr. Marianna Csabai
H-1126 Budapest, Tartsay Vilmos u. 3.
Tel: + 36 1 488 7008
Fax: + 36 1 488 7009
E-mail:

 

News on the amendments of Act I of 2012 on the Labour Code

According to the working paper available at the Government’s website, Act I of 2012 on the Labour Code (hereinafter referred to as the “Labour Code”) and other labour-related regulations – such as the Act III of 1952 on Civil Procedure, Act XCIII of 1993 on Labour Safety and Act LXXV of 1996 on Labour Inspection – are expected to be amended with effect from 1 January 2016. The planned amendments affect e.g. the regulations regarding the working place, termination and severance payments as well.

We will continuously inform you about the abovementioned amendments of the Labour Code if the single bill will become available.
 

Should you have any questions regarding the above, please feel free to contact us.
 
Dr. Marianna Csabai
H-1126 Budapest, Tartsay Vilmos u. 3.
Tel: + 36 1 488 7008
Fax: + 36 1 488 7009
E-mail:

Training Session

Dr. Marianna Csabai (CLVPartners) and Dr Natasa Randlova (Randl & Partners) held a joint training session in Prague to Czech HR managers who are responsible for the Hungarian HR management. The attendees has found very useful the interactive session where they learnt the differences between the Hungarian and Czech labour law and the major rules and daily practices.

Should you have any questions regarding the above, please feel free to contact us.
 
Dr. Marianna Csabai
H-1126 Budapest, Tartsay Vilmos u. 3.
Tel: + 36 1 488 7008
Fax: + 36 1 488 7009
E-mail:

The amendment of the Hungarian Labour Code

With the effective date of 01 January 2015 some provisions the Labour Code (Act No 1 of 2012) have been amended, as follows:
According to the previous provisions, based on the respective request of an employee, an employer was obliged to amend the working time of the employee to part time (half of the general full working time) provided that his or her child was younger than the age of three. From 01 January 2015 on, this provision has been extended so that if an employee is caring for three or more children, the obligation concerning the amendment of the working time to part time employment shall be applied until the age of five of the child. As this new rule introduced the definition of the “employee caring for three or more children”, the Labour Code now includes the definition of the employee who shall belong to the above category. Accordingly, an employee caring for three or more children shall be, any person who as a parent – within the meaning of the Act on Family Support –
i. is eligible for family allowance and receives or received childcare fee or childcare allowance, or
ii. received or receives child-rearing allowance.

The rules concerning the eligibility for annual leave have also been amended, accordingly an employee shall accrue holidays during the entire term of the sick leave, i.e. the previously applied 30 days limit have been abolished from the Labour Code.

According to the amendments, the employment contract of an executive employee cannot deviate from the provisions set out in Section 65 (3) a), b) and e) of the Labour Code. This means that employees receiving treatment related to a human reproductive procedure as specified in law (i.e. employees are protected during the treatment for a maximum of six months from the date the treatment begins) shall be considered as protected employees and therefore, the employer cannot terminate their employment during this period. (The termination protection rules set out in Section 65 (3) a) and b) of the Labour Code have already been applicable also to executive employees even before 01 January 2015.) The parties cannot deviate from this provision even with their consent in the frame of the employment contract.

Should you have any questions regarding the above, please feel free to contact us.

Dr. Marianna Csabai
Dr. Boglárka Kricskovics-Béli
Dr. Nóra Óváry-Papp

CLV Partners news

The amendment of the Act on Health Insurance

Act No. 111 of 2014 about the amendment of certain health and health insurance acts adopted on 16 December 2014 (“Amendment Act“) affected various Hungarian laws. In the frame of this present newsletter we summarize only the most significant amendments of those which affect Act No. 83 of 1997 on the services of the mandatory health insurance (“Health Insurance Act“). Additional provisions of the Amendment Act will be discussed by us in a separate newsletter.

As a consequence of the Amendment Act, the definitions set out in the Health Insurance Act were extended with the definition of income, monthly contractual income and salary, further, this part of the Health Insurance Act listed the financial health care allowances. These are infant care fee – instead of the previously applied maternity pay, which shall be only considered as an amendment in the name of the allowance -, childcare fee and sick pay.

According to the Amendment Act when defining the aforementioned financial health care allowances, further, (irrespective of certain exemptions) the sick pay payable on account of accident, the reported income – reached in any relationship effective on the date of the eligibility – serving a basis for determining the personal income before tax shall be taken into consideration instead of the income reached in a relationship on the basis of which the affected person should have been considered as insured.

It was added to the Health Insurance Act, that the eligibility for infant care fee shall begin on the date of the childbirth, or on the first date of the maternity leave in case of premature child, the latest.

The amount of the infant care fee and the childcare fee remained unaltered, however, the calculation of the income serving basis for the payment of the above fees – to which the rules defining the sick leave pay shall still apply – have been amended. Accordingly, in case of a continuous relationship the amount of the sick leave pay shall not be defined based on the daily average of the income gained in the year preceding the eligibility date for the sick leave pay. According to the Amendment Act, as a general rule, the basis for sick leave pay shall be defined on the basis of the average daily income accrued in a 180 days period between the first day of the year preceding the date of being eligible for the sick leave pay and the last date of the third month preceding the eligibility date. For example: if the eligibility date of the sick leave pay is 15 June 2015, the period between 01 January 2014 and 31 March 2015 shall be reviewed and the income gained within 180 days before 31 March 2015 shall be the basis for the calculation of sick leave pay.

By sustaining the current structure, the Amendment Act sets out those cases when the insured person does not have either 180 days income, or 120 days income – that shall already been considered as an exceptional case.

According to the provisions of the Amendment Act, the detailed rules of defining and calculating the infant care fee and the sick leave pay will be included in a Government Decree.

A significant amendment is included in the Amendment Act, namely, that if any of the parents shall be considered as sick on account of caring for and staying with his or her child in the course of a treatment rendered in a hospital, the amount of the sick leave pay shall be 50% of the sick leave base instead of the previously applied 60%.

The rules concerning childcare fee have also been amended. Accordingly, the mother or that person who was eligible to an infant care fee and whose insured status terminated while being eligible for infant care fee, shall receive childcare fee, provided that the eligibility for infant care fee was acquired during a relationship on the basis of which this person was insured and lasted for at least 365 days within the two years prior to the child’s birth, further, if the child is raised in his or her household.

If on the date being eligible for childcare fee or two years before this date a person is or has already been eligible for childcare fee with regard to his or her other child, the period of payment of childcare fee:

  • cannot be shorter than the defined period of the childcare fee, paid the latest, further
  • cannot be extended with the infant care fee’s payment period for which the parent is eligible on account of the second child; further
  • cannot be extended with the payment period of the childcare fee and childcare allowance defined on account of the birth of the last child.

These provisions of the Amendment Act entered into force with the effective date of 1 January 2015.

Should you have any questions regarding the above, please feel free to contact us:

Dr. Marianna Csabai
Dr. Boglárka Kricskovics-Béli
Dr. Nóra Óváry-Papp

CLV Partners news

Recent tax changes from labour law perspective

As result of the tax changes adopted at the end of last year, new tax regulations have entered into force as of 1 January 2015. The aim of this newsletter is to provide you with a brief introduction of these changes which may affect both employers and employees as well.

Tax burden of fringe benefits and of certain specific benefits
The scope of the fringe benefits that may be given to employees under the provisions of the Hungarian Personal Income Tax Act (“PIT Act”) has remained unchanged, but the annual limit of the fringe benefits subject to a preferential tax burden (35, 7%) has been decreased compared to annual limit applicable in 2014, from HUF 500 000 to HUF 200 000/ year.

As a consequence of the above, from January 1, 2015 the tax burden of the fringe benefits not exceeding the value of HUF 200 000 will remain unchanged (i.e. the value of the benefit multiplied with 1,19, after which 16% personal income tax and 14% healthcare contribution shall be paid, amounting in an overall 35,7% tax burden). The benefits provided in excess of the above value, according to the PIT Act shall qualify as certain specific benefits subject to a higher tax burden of 51,17% (i.e. the value of the benefit multiplied with 1,19 after which 16% personal income tax and 27% healthcare contribution shall be paid).

As an exception to the above, the law provides that in respect of the money allowances provided by the employer on Recreational Card (in Hungarian: „SZÉP kártya”) – the preferential tax burden rate of 35,7% shall continue to be applied even if such value exceeds the value of HUF 200 000 but remains under the limit of HUF 450 000, the latter defined as the annual recreational limit.

It is worth mentioning that in order to fall within the scope of the preferential tax burden rate (35,7%) a combination of fringe benefits and allowances given on Recreational Card is also an option in the sense that the employer may provide fringe benefits within a value of maximum HUF 200 000 plus further allowances may be allocated on Recreational Card for a further amount of HUF 250 000 (without exceeding the annual recreational limit defined above).

The new tax regulation also clarifies that students employed via school cooperations, shall be entitled to fringe benefits falling under the scope of the PIT Act under the same conditions as the employees employed by the employers who are hiring students as well.

Family allowances and tax allowances to first married couples
In 2015 the amount of family allowances introduced in the previous years, will remain the same, thus the allowances per one dependent shall amount up to HUF 62500, and in case of three of more dependents shall amount up to HUF 206 500, nevertheless the law provides that, from 2016 the amount of the family allowances granted for families with two dependents shall increase gradually within the consecutive four calendar years up to HUF 125 000.

Additionally, in the frame of the newly introduced changes, the category of persons entitled to family allowances and the category of persons receiving such tax statements has been also expanded, and further administrative requirements have been introduced in the sense that if parents will wish to take in advantage of such allowances, when completing their tax statement for 2015 shall also indicate the tax number of the dependents, as for the future the indication of other personal data (such as name, mother’s maiden name, address, place and date of birth) shall not be sufficient. Thus parents will be required to submit a request to the tax authority for obtaining a tax number for their dependants, if the dependants do not have a tax number.

Pursuant to the provisions of the PIT Act, as from January 1, 2015 every paying agent although not qualifying as employer who shall provide regular income to employees (especially monthly or weekly salary, service fee, royalty, compensation for personal contribution, other allowances) shall be obliged to assess the amount of the monthly family allowance. Thus a Principal /Assignor paying a regular monthly fee to the Agent/ Assignee on a contractual basis shall also be regarded as a paying agent.

A new category of tax allowances has also been introduced, for which first married couples are eligible who got married after December 31, 2014, provided that at least one of the spouses has its first marriage.

The above tax allowance may be used prior the use of family allowances, by which the first married couples may reduce their payable tax with an amount of HUF 5000 (reflected on a tax base level this means that the overall income could be this decreased with a total amount of HUF 31250.

First married couples are eligible for the tax allowance as from the first month following the month in which they got married for a duration of maximum 24 months, but not later than the month from which the eligibility for family tax allowance has arisen. If within the period of 24 months the marriage breaks up, the tax allowance shall no longer apply.

The couple may take advantage of the above tax allowance either by sharing it, or individually (just one of them). As a precondition for obtaining such tax allowance a joint tax declaration of the couples shall be required, by indicating the tax numbers of the spouses. clearly specifying which one of them will take advantage of the tax allowance as well as their decision on sharing such tax allowance.

Travel orders issued under the PIT Act
The definition of travel orders has also been changed, according to which beside the previously used paper-based travel orders, from now on electronic travel orders processed and stored under the conditions required by law, or any electronic supporting document relating hereto shall also be accepted.

Temporary agency workers
Within the meaning or article 24 subsection 3 of the PIT Act, as from January 1, 2015 for the case when temporary employee are employed in Hungary via a foreign temporary agency, the acquiring Hungarian company may act as employer in respect of the income provided to the temporary employee, thus the law provides for the possibility that the tax obligations regarding the assessment and declaration of personal income tax may be fulfilled by the Hungarian acquiring company.

***

This article contains only general information, thus by its nature it shall not constitute as legal advice nor a substitute for and the information provided herein may not be regarded as complete.

Should you have further queries CLV Partners is ready to answer your questions.

Dr. Marianna Csabai
Dr. Antónia Zsigmond

CLV Partners news

Prohibition of Sunday-work in the retail sector

On 16 December 2014 the Hungarian Parliament has adopted the Act on the prohibition of Sunday-work in the retails sector (“Sunday Act”), which will enter into force on 15 March 2015.

According to the preamble, the aim of the Act was to protect the most important building stone of the Hungarian society, when it conflicts with the freedom of trade. Though the above interest deserves protection, on the other hand it shall be noted that according to the most recent surveys conducted after the submission of the draft Sunday Act, the Sunday Act will likely result in either redundancies or – to avoid them – in the decrease of the salary of the employees in the retails sector, further, in the declining of the consumption demand, which are serious factors and impacts that should have been considered in advance.

The Act provides for certain expressed exemptions from the general rule, according to which shops cannot be open on Sundays, further, shops in the retails sector can only be open from 6 a.m. to 10 p.m. on normal “retail” days. Pharmacies, shops in international airports, railway stations and bus stations, petrol stations, markets, restaurants may be open and cultural and bathing services, etc. may be rendered even on Sundays.

Shops – not falling under the exemptions – may operate four Sundays (from 6 a.m. to 10 p.m.) before 24 December and on another Sunday, provided that they have notified the respective commercial authority at least 15 days before the proposed Sunday operation.

Notwithstanding the above rule, bakeries (selling exclusively bakery wares and milk products), may be opened from 5 a.m. to 10 p.m. on “retail” days and between 5 a.m. and 12 a.m. on Sundays and business holidays. In addition to the above newsstands and florist’s – provided that their income do not exceed the threshold set out in a separate act – may be open from 6 a.m. to 12 a.m. on Sundays and business holidays. Stores in sport centres are also allowed to operate on Sundays and business holidays during the term of the sport events.

The Hungarian Authority for Consumer Protection shall supervise the non-compliance with the Sunday Act. In case of any breach of the provisions of the Sunday Act, the Authority must decide about the temporary closure of the respective store,
for 5-15 days in case of the first breach
for 30 days in case of the second breach
for 90 days in case of the third breach
for 365 days in case of any further breaches.

It shall be noted that after considering the specialties of a city or village or any part thereof (such as tourism, shopping patterns, etc.) a Government Decree may set out rules differing from the provisions of the Sunday Act.

Further limitations to this Act may be regulated in the frame of municipality decrees and the commercial authority may also limit the operation of such stores, shops, etc. that are allowed to operate on Sundays, if it deems important in order to protect the interest and right for rest of the inhabitants living in that location.

As a consequence of the Sunday Act, the Hungarian Labour Code – i.e. the list of those cases when ordinary work may be ordered on Sundays – was also amended. Therefore, Section 101 of the Labour Code was extended to those employees who may be employed on Sundays according to the provisions of the Sunday Act. In this regard, we note that right after the approval of the Sunday Act by the Parliament an amendment proposal was submitted concerning the aforementioned provision of the Labour Code and the provision regarding Sunday work allowances. Therefore, we will provide you with an update in this regard.

Should you have any further questions the lawyers of CLV Labour Law Practice Group are happy to assist:

Dr. Marianna Csabai
Dr. Boglárka Kricskovics-Béli
Dr. Nóra Óváry-Papp

CLV Partners news