Six months have passed since May 25 when the General Data Protection Regulation (GDPR) became applicable. There are several rules in the GDPR that leave space for interpretation and implementation. Besides the general guidelines and opinions issued by the European Data Protection Board and the national data protection authorities – as Hungarian National Authority for Data Protection and Freedom of Information (NAIH) in Hungary –, decisions in individual cases can serve as compass in finding the right direction how the provisions of the GDPR are interpreted.
Of course, it takes time until the first decisions and judgments will be issued under the GDPR but we may expect more and more decisions and judgments that can shape the data protection practice.
Experience has shown that NAIH is active; several proceedings have been initiated on controlling the data processing practices of operators and assessing compliance with data protection laws and regulations.
Our colleagues constantly monitor the evolution of case law and provide information about any changes.
In its resolution published on 19 September 2018, the National Authority for Data Protection and Freedom of Information (NAIH) assessed the criteria to take into consideration during the process of setting a fine, especially the level of the fine that NAIH may impose in case of the first infringement of the data protection regulations.
The Authority is being guided by the provisions of the Regulation (EU) 2016/679 of the European Parliament and of the Council (“Regulation”) and the Act CXII of 2011 on Informational Self-determination and Freedom of Information (“Info Act”) with regard to the determination of the fine.
Article 83 (1) of the Regulation states, that the administrative fines shall be effective, proportionate and dissuasive. Pursuant to Preamble (148) in a case of a minor infringement or if the fine likely to be imposed would constitute a disproportionate burden to a natural person, a reprimand may be issued instead of a fine.
This provision was completed by Section 75/A of the Info Act according to which the Authority shall exercise its competence provided for in Article 83 (2)-(6) of the Regulation in due consideration of the principle of proportionality, in particular with the provision that in the event of any non-compliance with the Regulation for the first time, the Authority shall in principle issue warning to the data controller or data processor in order to arrange the remedy of the infringement.
The Authority shall take into account the Data Protection Working Party (WP29) guidelines on the application and setting of administrative fines for the purposes of the Regulation 2016/679, available at the following link: http://ec.europa.eu/newsroom/article29/item-detail.cfm?item_id=611237
The Act LII of 2018 on the social contribution tax was published on 31 July, 2018 and it will significantly increase the tax items payable after the wages and other incomes from January 1, 2019.
The termination of healthcare contribution (EHO) and SZOCHO with the rate of 19.5% on income instead of EHO are considered to be significant changes of the new regulation.
The new provisions clearly increase the dues of the employers, e.g. increasing tax rate after the fringe (non-wage) benefits, increase of tax base for calculating and the tax rate in case of dividend income, and the significant reduction of tax reliefs. Therefore during planning of wages for the next year, the following new rules shall be considered.
In case of the income withdrawn from the business account, dividend income, entrepreneurial dividend fund, capital gains income, the maximum amount of SZOCHO shall be increased to19,5 percent of twenty-four times of the minimum wage, which shall be HUF 645.000, – calculating with the minimal wage in the present year – from the current amount of HUF 450.000. In addition, the base of SZOCHO payable after the insured member of general partnership, limited partnership and limited liability company shall be 112,5 percent of the minimum wage.
Generally the pay office/employer shall pay SZOCHO, however in some special case the private person earning the income shall pay the SZOCHO. There are special legal provisions regarding assignment, temporary agency work and employment relationship established by more than one employer.
Abolished tax reliefs
– tax relief for young employees under 25 years and employees over 55;
– tax relief for participants in Karrier Híd Program;
– tax relief for research and development activity;
– tax relief enforceable by the employer employing doctoral candidate employees or students participating doctoral education determining by the Act CCIV of 2011 on the national higher education;
– tax relief for permanent job-seekers;
– tax relief in connection with the payment of child care allowance and benefit.
Please note that the tax relief which may be claimed for definite period of time shall not be ceased automatically by 1 January, 2019. These may be obtained during the entire validity period.
The following group of people will be entitled to tax reliefs from the next year:
– the unskilled workers and employees in agricultural positions;
– people who have been out of job for a particular period of time;
– woman nursing three or more children,
– disabled employees,
– workfare workers.
Only one type of tax relief shall be claimed regarding any employee at the same time. In case of eligibility for more tax reliefs, the employer may decide, which tax relief to claim.
The Act XLI of 2018 on the alteration of the tax law and other related acts, furthermore on the super-tax of immigration was published on 26 July, 2018 and it will significantly amend the system of the cafeteria allowances and makes the employment of the retired persons more favourable from the next year.
We summarize the essence of the changes as follows:
– only the so called “Széchenyi Pihenőkártya” (SZÉP Card) will remain in the favourable tax category (34,5% in the next year) with a frame of HUF 450.000.-/year; – the following allowances fall under the tax category of 40,71% in the next year: SZÉP Card over the frame detailed above; gift voucher once a year, up to max. 10 % of the wage minimum; – all other allowances will be calculated based on the general rules, with the general tax rate as salary in the next year.
What to do in connection with the above mentioned changes: – review of the cafeteria policy; – review and appropriate amendment of the documents containing the cafeteria allowances (employment contracts, information letters).
In the next year in case of pensioners employed under the Labor Code no social contribution and social contribution tax (szocho) have to be paid. With regard to that the pensioners (falling into the above mentioned category) will be not entitled to social security allowances.
On 1 July 2018 entered into force the modification of Act V of 2006 on Companies Registration and Winding-up Proceedings amending the rules of winding-up, especially the simplified procedure, the statutory supervisory procedures and also makes possible to file with the court application for the registration of changes prior to the effective date.
Preliminary request for the registration of changes The request for registration of a (future) change can be submitted in advance so even before the effective date of change. Nevertheless, the preliminary request for registration of future company change cannot be submitted within more than 30 days prior to the date of change.
Executives without right of representation It is also mandatory to register those company executives who do not have right of representation for the company. This amendment concerns in particular companies where the management is constituted by a board of directors where not all directors have right of representation for the company.
Legal supervisory procedure Any person claiming to have a legal interest in starting a legal supervisory procedure against a company may only start a legal supervisory procedure in its own name as applicant therefore no name application is not possible.
Winding-up, simplified winding-up procedure Any company form (this including private limited companies (in Hungarian “Zrt”) and limited liability companies (in Hungarian “Kft.”) may choose to terminate itself by simplified winding-up procedure, provided that is not subject to mandatory audit. In the case of simplified winding-up, no administrator is required to be appointed, the administrator’s duties are performed by the company’s executives (i.e. managing directors). The simplified winding-up procedure shall be at first reported to the Hungary Tax Authority who shall automatically inform the company court that shall publish a notice thereof in the Company Gazette.
A summary regarding the labour law related changes in 2018 – mandatory minimum wage, social contribution tax, healthcare contribution, simplified contribution to public revenues, childcare benefits, sick pay, cafeteria rules, statutory retirement age
The labour law related changes in 2018
Government Decree No 430/2016. (XII. 15.) determines the amount of the mandatory minimum wage. The mandatory minimum wage for full-time employees increased with 8% as of 1st January 2018, from 127,500 to gross 138,000 HUF. The guaranteed minimum wage paid to skilled workers rose by 12% in the case of completion of full time working as of 1st January 2018, from 161,000 to 180,500 HUF. The social contribution tax (SZOCHO) and the amount of the healthcare contribution (EHO) reduced from 22% to 19,5%. The simplified contribution to public revenues (EKHO) also decreased, the employer shall pay 19,5% EKHO instead of the previous 20%.
Due to the increasing minimum wage the amount of the childcare benefits (GYED), the benefits for university students and graduates grew as well as the sick pay as of 1st January 2018. The eligible families are entitled to a maximum of 193,200 HUF in childcare benefits. Students enrolled in a bachelor’s program will be eligible for 96,600 HUF support and students enrolled in a master’s program for 126,350 HUF. Female university students or graduates are eligible for an extra year of child support up to the child’s second birthday. Moreover, fathers also eligible to claim baby-care allowance (CSED) in more cases from 1st January 2018. The daily maximum of sick pay increased from 8500 HUF to 9180 HUF.
In addition to the above, the cafeteria rules have changed. New cafeteria element: a student loan reimbursement as employer benefit can be provided tax free up to the installments but not more than 27,600 HUF monthly. The conditions for a tax free housing allowance eased, the ceiling price of this benefit became higher (nearly 83,000 HUF). The burden on employers reduced from 43,66% to 40,71% in case of certain specific benefits (Erzsébet vouchers, hot meals at the work place, monthly public transport ticket, school starting support, contribution to a voluntary health fund/pension fund). The costs of cafeteria cash payment and benefits may be granted as Széchenyi Recreation Card („SZÉP” Card: accommodation, catering, leisure) remained the same 34,22%, if it does not exceed 450,000 HUF.
The statutory retirement age increased to 63,5 year and the amount of pensions amended favorably. The pensions (including among others retirement pension, widows’ pension, orphans’ allowance etc.) increased with 3% with the effective date of 1st January 2018. The amount of minimum pension remained unchanged (28,500 HUF).
According to the Act CL of 2017 on the Rules of Taxation 271§ (16), the taxpayers shall register their foreign bank accounts valid on 1st January 2018 with the National Tax and Customs Administration of Hungary.
The deadline of the announcement is 31th January 2018. We kindly remind you to fulfil your obligation by the deadline, if it is applicable and you have foreign bank account.
In September 2017 Government Decree 250 of 2017. (IX.5.) entered into force, modifying certain healthcare, health insurance and pharmaceutics related government decrees.
On 7 September 2017 Government Decree 250 of 2017. (IX.5.) regarding the modification of certain healthcare, health insurance and pharmaceutics related government decrees entered into force, hereby modifying the Government Decree 235 of 2009. (X.20.) („Government Decree”) regarding the rules of the authorization procedure of medical research, clinical trials of products intended for human use, as well as the clinical trials of medical devices for human use, intended for clinical trials.
The changes of the Government Decree entering into force on 1 January 2018 concern the modification of the research and examination project. In the Hungarian text a slight difference can be found in the wording between the previous version and the one entering into force.
As a new provision entering into force on 1 February 2018 the Government Decree regulates the authorization of research involving ionizing radiation, the serves compliance with EU legal acts (Euratom).
The present terms of use sets out the conditions of the usage of the website https://clvpartners.com (“Website”) operated by a CLVPartners Law Firm (registered seat: 1126 Budapest, Tartsay Vilmos u. 3.; e-mail address: ; registered by Budapest Bar Association) („Law Firm” or „our Law Firm”) as well as the respective data privacy information. By accessing and using the Website You, as user (“User”) declare to have read and accepted the present terms of use. Should you not agree with the terms and conditions of the present terms of use, please do not visit our Website.
[accordion] [accordion_item title=’I. USAGE OF THE WEBSITE‘]The present Website includes information in connection with the professional areas of the Law Firm, the aim of which is to present the operation of the Law Firm, further, to provide information about the actual amendments to the Hungarian laws and further legal actualities, as well as make contacting the Law Firm easier. The present Website may be used by the Users without any registration; its content is freely accessible to the public. The Law Firm does it outmost to the accuracy of the information and materials published on the Website, however, these are published only for information purposes and can never – under no circumstances – be considered as legal advice, further, cannot replace legal consultation extended to all relevant circumstances of the given case. With regard to the above – in the lack of any different legal provisions – the Law Firm expressly excludes any liability for direct or indirect damages arising from visiting or using the Website, further from the usage of any information published on the Website. Information published on the Website does not establish any contractual relationship by and between the User and the Law Firm, further, does not qualify as bid or offer for bid. Should you have any legal questions in connection with the content of the Website or any information made there available, please be so kind as to contact our Law Firm. The Law Firm reserves the right to alter or remove the Website or any part thereof, their arrangement, any materials shared on the Website, further, to amend the terms and conditions of the present terms of use. Any amendment to the terms and conditions of the present terms of use shall be considered as effective regarding the affected User after first visiting the Website following the amendment.
Intellectual property Any materials whether narrative of pictorial, photos, trademarks, logos, graphic or other materials are copyright protected and fall under trademark protection. The User may use the copyright protected materials published on the Website in line with the provisions of Copyright Act (No 76 of 1999) concerning free use, including but not limited to the browsing of the Website, further, saving the parts of the Website and any written materials published on it on the User’s own computer’s hard drive or printing them for private purposes. Usage according to the provisions concerning free usage is allowed and free of any charge only to the extent when it is not harmful to the usage of any materials under copyright and does not cause unreasonable damages to the lawful interests of the Law Firm, further, if it complies with the obligation of fair usage and does not aim any goals not compliant with the principle of free usage. Without the prior written approval of the Law Firm, the User is not entitled to use the trademark (with special regard to the word trade mark “CLVPartners”) and other signs, related designs of the Law Firm. Unlawful usage of the Website, any intellectual property forming its material part or any materials publish on it, shall result in civil and criminal law consequences.
References The Website includes or may include references to website operated by other persons or organizations which may be useful for the User in the given case. However, please consider that these websites shall be used in line with their terms of use, therefore, in case of their visits, we advise checking their terms of use. The Law Firm puts special emphasis on including only such references on the Website which leads to reliable and professionally acknowledged websites, however, does neither undertake any responsibility for any information included therein, further, for any content showed on such websites and for any circumstances in connection with the website and the references, nor for any direct or indirect damages arising from them. [/accordion_item] [accordion_item title=’II. DATA PRIVACY INFORMATION („INFORMATION”)‘]Before contacting us, please be so kind as to review the content of the Information. Please note that should you contact us through the Website, this will be considered as expressed acknowledgement and understanding of the content of this Information. The present Information shall be applied to any and all data processes though the Website during which any natural person (“Affected Person”) contacts the Law Firm as data controller via e-mail, phone, facsimile, or post or submits a job application thorough any of the above channels.
Data processes through the Website
1. Contacting our Law Firm Should the Affected Person request for any feedback or information in connection with any of his/her prior request, the Law Firm fixes the data of the Affected Person electronically which are processed by the Law Firm exclusively and only for the duration to provide the Affected Person with the response. Please be informed that by contacting us, the Affected Person gives his/her expressed consent to the processing of his/her data according to Section 5 (1) a) of the Information Act (Act No 112 of 2011 about freedom of information and information self-determination right). Our Law Firm controls the data provided by the Affected Person voluntarily in the course of contacting us (with special regard to the following data: name, e-mail address, phone number, facsimile number, data provided in connection with the requested information.) Only the colleagues of the Law Firm may have access to the data, to the extent necessary for the purpose of the data controlling, and our Law Firm does not engage any data processors.
2. Job applications Our Law Firm as data controller also collects and controls data in connection with workforce selection (for the purpose of carrying out the recruitment and selection process, and later to get in contact with the applicant). For the above purposes private and sensitive data may be controlled by our Law Firm, should these be disclosed to us by the Affected Person when contacting us through the Website and applying for a job. The precondition of applying for a job is – irrespective of the way thereof – is the voluntary consent of the Affected Person, therefore, we inform the Affected Person that by the submission of his/her application she/he consents to the handling of his/her data. Data being controlled: surname and last name, address, mobile phone number, e-mail address, schools and education, title, profession and professional experiences, language knowledge, present or past place of work (name), place and date of birth, photo, and any other data the controlling of which shall be deemed reasonable or that are provided by the Affected Person simultaneously with applying for a position. Any applications filed with us will be handled only for aim of the data handling, namely, until filling in the respective position. In case of specific requests, which the applicant may make through our contact details provided above, the applicant may request our Law Firm to keep his/her application data for 2 years from the end of the application process. Only the colleagues of the Law Firm may have access to the data, to the extent necessary for the purpose of the data controlling, and our Law Firm does not engage any data processors. The Affected Person shall be liable for the reality of the data provided under this section and should the Affected Person provide us with any data of any third persons, the Affected Person shall warrant that such data have been forwarded to our Law Firm lawfully and especially that the third person consented to their usage. The Affected Person shall refrain from breaching any patent, IP, copy and personal or other rights of any third persons. Any improper statement, or hiding any data may result in the refusal or the application or later the termination of the employment of the Affected Person.
3. Newsletter Should the Affected Person register to our newsletter services by giving his/her name and e-mail address on the Website, the Law Firm will submit approximately monthly one newsletter to the Affected Person. The Affected Person may resign from the Newsletter services through the Website or through sending an e-mail or letter to our Law Firm to any of the addresses and contract details set out above for free of charge without any reasoning.
4. Website Please note that the Website does not use and contain any cookies and web beacons, references made from external servers and web-analytic tools. Please be informed that an individual identifier (internet protocol, IP) shall be ordered usually in blocks per each country to any computer and equipment with Internet access. The IP address may be used to identify in which country, county, state the given computer has been connected to the internet. Googly Analytics collects these IP addresses in order for the owners of the websites have a view which country their websites are visited from.
Data Safety In connection with the data controlling activities, our Law Firm has complied with the data safety rules and has formed its data management processes by considering the protection of the Affected Persons’ private sphere. Our computer system is protected with firewall and we also take care of the virus protection of our network. We continuously review the technical prescriptions according to the statues of technic from time to time and amend it when and where necessary. Please note that electronical messages forwarded though the internet are vulnerable against network threats. Our Law Firm makes the steps necessary and generally acceptable for ensuring protection against such threats.
Rights of the Affected Person The Affected Person may request for information in connection with the management of his/her data, request for the correction, deletion or distrain of the data, further may exercise the rights set out in Section 14-19 of the Information Act. further, the Affected Person may object the controlling of the data or in case of the breach of his/her rights, further, in cases set out in Section 21 of the Information Act may turn to the court against the Law Firm – including the court of tribunal competent at the permanent or temporary address of the Affected Person – as well as to the Hungarian National Authority for Data Protection and Freedom of Information (1125 Budapest, Szilágyi Erzsébet fasor 22/c.; postal address: 1530 Budapest, Pf.: 5.; tel.: 36(1)391-1400; e-mail: ; website: http://naih.hu).
Others Our Law Firm reviews the present document from time to time and whenever it deems necessary may amend the content thereof unilaterally, therefore, please make sure to reivew it before getting in touch with us. [/accordion_item] [/accordion]
Regulation No. 7/2017 (1 June) of the Ministry of Justice about registered seat services entered into force on 1 July 2017 in connection with the amendment of the Companies Act which set out among others the following important regulations:
The agreement shall be in writing between the principal (company) and the agent who provides the seat service.
The agreement shall not be a fixed-term contract only if the company was established for a fixed period of time. The right to terminate shall not be exercised during the first year after the conclusion of the contract.
Only those properties may be used as the seat of a company which are exclusively owned by the agent who provides the seat service or for which the provider’s user rights have been registered at the Land Registry.
The agent shall ensure that the mails addressed to the company are taken over at the registered seat and shall also notify the company on that fact within one working day after the receipt of any mail.
The Regulation No. 9/2017. (VII. 18.) of the Ministry of Justice on the amendment of the above Regulation was published on 19 July 2017 and entered into force on the day following its publication in which the most important changes are the following:
The agent shall be entitled to provide seat service if the owner of the property gave prior written consent to providing seat and one of the following conditions is fulfilled: a) the parties are affiliated companies or companies linked by virtue of participating interests under the Accounting Act, b) the agent is registered in the Trade Registry as the company’s delivery agent, or c) further from providing registered seat for the company there is a civil law relationship between the parties for providing long-term accounting services.
The parties shall harmonize their existing agreements for providing seat with the new regulations until 30 June 2018, the latest, and if there was not any written agreement between them, such contracts have to be put in writing.
The existing agreements for registered seat services shall be ineffective on the following day the above deadline (i.e. 30 June 2018) if the contract does not correspond to the aforementioned new regulations.
