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Entry ban on travel to Hungary in force until 1 November

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The Hungarian Government has introduced new travel restrictions with regard to the coronavirus pandemic, which regulate entry into Hungary from 1 September 2020.

The restrictions do not apply to border crossing by freight traffic or with an official passport, and for those who can prove they have contracted COVID-19 within six months prior to the border crossing.

Hungarian citizens and foreign nationals with equivalent status must submit to a possible medical examination upon entry, followed by a ten day mandatory quarantine. Exemption from quarantine may be granted after two negative SARS-CoV-2 PCR tests.
Non-Hungarian citizens cannot enter Hungary using passenger traffic. There are exceptions from this general rule regarding business and economic purpose travel, commuters, travellers passing through Hungary, military convoys, and sports and cultural events.
The relevant police authority may also authorise entry into Hungary upon request of the foreign national for certain personal and official reasons defined in the legislation. The rules regarding possible medical
examination upon entry, mandatory quarantine and the conditions for exemption from quarantine also apply.

On 1 October the ban was extended to 1 November.

 

The new entry ban on travel to Hungary: what does it mean?

Medium-sized companies, News, Start-ups / / , , ,

The Hungarian Government has introduced new travel restrictions in the context of the coronavirus pandemic. The Decree on travel restrictions during the epidemiological preparedness period (Decree no. 408/2020. (VIII. 30.), the ‘Decree’) regulates entry into Hungary from 1 September 2020 to 1 October 2020.
1. Hungarian citizens and foreign nationals with equivalent status
These individuals can enter Hungary with a private passport or other travel document entitling them to entry, and must submit to a medical examination upon entry. They will, however, be quarantined in any event. Where will depend on whether or they show signs of infection during the border check: if the individual has symptoms, s/he must quarantine in a designated public institution, if not, s/he must quarantine for a 14-day period at home.

2. Exemption from quarantine
Upon request of the quarantined person, the appropriate epidemiological authority may allow him/her to take a SARS-CoV-2 PCR tests two times within five days, at least 48 hours apart.
If the results are negative, the epidemiological authority ordering the quarantine will give an exemption from quarantine.
In this case, the costs of the two negative PCR tests required for the exemption will be borne by the individual. The cost is EUR 100 for each test, and EUR 10 as the general fee for the exemption decision.

3. Labour law implications of returning to Hungary from abroad
Under the legal provisions in question, a person who is in officially ordered home quarantine due to private travel abroad shall not be considered incapacitated for work. This means s/he will not be entitled to benefits payable to incapacitated employees for the duration of the quarantine.
If it is possible to employ the employee from home either in his/her own job or in another job the employee should be paid a wage. However, if this is not possible, the employee’s absence from work will be considered justified unpaid absence.

4. Cases of incapacity for work
If the home quarantine was not ordered due to return from a private trip, but the employee is banned from working for public health reasons or is officially isolated for public health reasons
(designated quarantine), or cannot come to work due to an epidemiological or veterinary quarantine, and cannot be even temporarily employed at a different workplace (or in a different job), then s/he will be considered incapacitated and entitled to benefits for incapacitated employees.
It is important to note, that the Decree does not apply to:
– border crossing by freight traffic;
– border crossing with an official passport; and
– a person who, upon entry into Hungary, provides credible proof that s/he has contracted COVID-19 within six months prior to the date of the border crossing.

5. Entry of foreign nationals into Hungary
Non-Hungarian citizens cannot enter the territory of Hungary using passenger traffic. The following are exceptions from the general rule above:
– A chief executive officer or an employee of a domestic company or a company incorporated in any state which is in a business relationship (under the relevant tax legislation) with another company registered in any other state may enter Hungary without restrictions, provided s/he provides evidence of the business purpose of travel.
– The government will allow Czech, Polish and Slovak citizens to enter with a negative test within five days, but it is expected that at the request of other states, several countries may be granted a concession for the entry of their nationals for tourist purposes.

6. Commuters
Citizens of Hungary or neighbouring states living within a 30km radius of the state border may enter the territory of the other state within a 30km radius of the state border without restrictions and stay there for a maximum period of 24 hours.

7. Persons passing through Hungary
Foreign nationals can enter Hungary For transit purposes, if they submit to a health examination upon entry and this examination does not raise suspicion of infection.

8. Official exemption from the entry ban upon request
Upon request, the relevant police authority can authorise entry if the requesting party proves that the purpose of entry is, inter alia:
– participation in court or official proceedings;
– business activity or other work activity which is justified by a letter of invitation from a central governmental body, an independent regulatory body or an autonomous public administration body;
– travel using passenger traffic in connection with work related to a transport activity, the purpose of which is to reach the place of departure of the transport task (place of commencement of work), or returning after this work, if evidenced by a certificate issued by the employer;
– access to health care, participation in certain family events, or for other reasonable reasons;
These individuals must submit to a medical examination on entry to Hungary, and
– if infection is suspected: will not be granted entry;
– if infection is not suspected: must quarantine for 14 days.

President of HDPA tempers position on thermometers!

Company groups, Data protection, Employment, labour law, Medium-sized companies, News, Start-ups / / , , , ,

The Head of the Hungarian Data Protection Authority in his interview made an announcement contrary to the Authority’s previous official position.

Unlike in Spring, in the current epidemiological situation in Hungary it is no longer disproportionate to implement body temperature measurement as a general measure, however, recording the results is still considered unjustifiable, because as health related data it would be considered a special category of personal data which should be especially protected.

The Head of the Hungarian Data Protection Authority in his interview made an announcement contrary to the Authority’s previous official position, that unlike in Spring, in the current epidemiological situation in Hungary it is no longer disproportionate to implement body temperature measurement as a general measure, however, recording the results is still considered unjustifiable, because as health related data it would be considered a special category of personal data which should be especially protected.

As a reminder, the Authority’s guidelines issued on 11 March 2020 and its confirmatory official position issued on 28 April 2020 considered disproportionate the requirement of screening tests with any diagnostic device (in particular, but not exclusively, with a thermometer), as the epidemiological situation in Spring did not warrant such measures.

The HDPA president’s statement did not affect the rest of the previously issued guidelines and official position, therefore all data processing in connection with the novel coronavirus epidemic such as body temperature measurement may only be introduced in the legitimate interest of the employer, substantiated by a proportionality test and the measurement shall be conducted by healthcare professionals or under their professional supervision under Article 9 (3) of the GDPR.

The Authority invariably requires employers to prefer measures which do not require the processing of personal data (basic hygiene, provision of disinfectants, adequate cleaning, provision of protective equipment, distance between workers).

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

The transitional rules following the end of ’state of emergency’

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The transitional rules following the end of ’state of emergency’ have been established by Act LVIII of 2020 on the Transition Period, the most important of its provisions summarized as follows:

According to the transitional provisions, in the sectors of tourism, restaurant and catering services, entertainment, gambling, film industry, performers, event coordinators and sport services the lease of non-residential premises may not be terminated by the lessor until 30 June 2020. Lease agreements of state or municipally owned premises, which would have expired during the ’state of emergency,’ may be extended – without a new tender – until 16 September 2020 by the written declaration of the lessee, issued during the emergency or on the last day of the lease term at the latest.

Derogations from the Labour Code implemented during the emergency remain in effect until 1 July 2020, however, working time frames ordered unilaterally or by mutual agreement of the parties shall remain applicable until the end of the working time frame, regardless of the termination of ‘state of the emergency’.

The Békés County Government Office acting as the state employment body, may – at the request of the employer – allow the use of a working time frame of up to 24 months or a settlement period in the case of a new investment of national economic interest generating employment.

Most of the transitional rules concern legal entities and other organizations not considered legal entities, and these rules remain in force until 31 December 2020.

The transitional provisions affect the operation of the main decision-making bodies and the procedure for convening them. The temporary rules prescribe for the decision-making bodies of legal entities to be convened within 90 days of end of the ‘state of emergency’ (which ended on 18 June according to Prime Minister Decision No. 41/2020. (VI. 17), i.e. 16 September 2020, and the following shall be on their agenda in accordance with the Gov. Decree:

·         decisions of the management during ‘state of emergency’ on matters within the competence of the decision-making body;

·         decisions regarding mandates of the organizations’ managing directors, board members or auditors, which expired during the ‘state of emergency’ if no decision has been made to extend or renew the mandates

·         decisions regarding the share capital if they could not have been made during the ‘state of emergency’;

·         in case of private limited liability companies, decisions regarding the reduction of the share capital if they could not have been made during the ‘state of emergency’.

Although it is already possible to make decisions in person, until 31 December 2020 it is also possible to make decisions through flexible solutions such as electronic decision-making without holding a physical meeting, even if the deed of foundation does not provide for its possibility or conditions.

Regardless of their expired mandate, the managing directors (supervisory board member, etc.) shall continue to perform their duties even if the legal person did not provide for renewal of terms, until the date determined by the decision-making body’s resolution, but until 90 days after the end of ‘state of emergency’ at the latest (16 September 2020).

If the mandate is terminated after the end of ‘state of emergency’, but before session of the decision-making body, it shall also be put on agenda, however, the mandate shall continue to be effective until the date set out in the resolution, but until 90 days after the end of ‘state of emergency’ at the latest.

Legal entities’ decision making bodies may also hold their sessions online.

In order to prevent misuse of the extended deadline for adopting the Annual report, where its adoption requires at least a ¾ majority of votes, resolving a valid decision on any other matter requires unanimous vote until the Annual report is adopted, until 30 September 2020, whichever is earlier.According to the transitional provisions, in the sectors of tourism, restaurant and catering services, entertainment, gambling, film industry, performers, event coordinators and sport services the lease of non-residential premises may not be terminated by the lessor until 30 June 2020. Lease agreements of state or municipally owned premises, which would have expired during the ’state of emergency,’ may be extended – without a new tender – until 16 September 2020 by the written declaration of the lessee, issued during the emergency or on the last day of the lease term at the latest.

Derogations from the Labour Code implemented during the emergency remain in effect until 1 July 2020, however, working time frames ordered unilaterally or by mutual agreement of the parties shall remain applicable until the end of the working time frame, regardless of the termination of ‘state of the emergency’.

The Békés County Government Office acting as the state employment body, may – at the request of the employer – allow the use of a working time frame of up to 24 months or a settlement period in the case of a new investment of national economic interest generating employment.

Most of the transitional rules concern legal entities and other organizations not considered legal entities, and these rules remain in force until 31 December 2020.

The transitional provisions affect the operation of the main decision-making bodies and the procedure for convening them. The temporary rules prescribe for the decision-making bodies of legal entities to be convened within 90 days of end of the ‘state of emergency’ (which ended on 18 June according to Prime Minister Decision No. 41/2020. (VI. 17), i.e. 16 September 2020, and the following shall be on their agenda in accordance with the Gov. Decree:

·         decisions of the management during ‘state of emergency’ on matters within the competence of the decision-making body;

·         decisions regarding mandates of the organizations’ managing directors, board members or auditors, which expired during the ‘state of emergency’ if no decision has been made to extend or renew the mandates

·         decisions regarding the share capital if they could not have been made during the ‘state of emergency’;

·         in case of private limited liability companies, decisions regarding the reduction of the share capital if they could not have been made during the ‘state of emergency’.

Although it is already possible to make decisions in person, until 31 December 2020 it is also possible to make decisions through flexible solutions such as electronic decision-making without holding a physical meeting, even if the deed of foundation does not provide for its possibility or conditions.

Regardless of their expired mandate, the managing directors (supervisory board member, etc.) shall continue to perform their duties even if the legal person did not provide for renewal of terms, until the date determined by the decision-making body’s resolution, but until 90 days after the end of ‘state of emergency’ at the latest (16 September 2020).

If the mandate is terminated after the end of ‘state of emergency’, but before session of the decision-making body, it shall also be put on agenda, however, the mandate shall continue to be effective until the date set out in the resolution, but until 90 days after the end of ‘state of emergency’ at the latest.

Legal entities’ decision making bodies may also hold their sessions online.

In order to prevent misuse of the extended deadline for adopting the Annual report, where its adoption requires at least a ¾ majority of votes, resolving a valid decision on any other matter requires unanimous vote until the Annual report is adopted, until 30 September 2020, whichever is earlier.

What does Hungary’s new state of epidemiological preparedness’ involve?

News /

Simultaneously with the declaration of the ‘state of epidemiological preparedness’, Act LVIII of 2020 on transitional rules concerning the end of state of emergency and on the state of epidemiological preparedness entered into effect (transition act). It amends the public health emergency of Act CLIV of 1997 on healthcare (the ‘Healthcare Act’, s228).
Epidemiological preparedness can be declared for six months in the event of a public health emergency, and allows the Government to implement less stringent restrictions than during a ‘state of emergency’. First, we will summarise the restrictions currently in effect, and then the additional restrictions possible to implement during a public health emergency.

Current restrictions

Currently, the following restrictions are in effect:

1.    During the state of epidemiological preparedness, only citizens of member states of the European Union and the European Economic Area (and their family members) can enter Hungary using passenger transport, with the exception of citizens of the United Kingdom. Citizens of Serbia and Romania may also enter using passenger transport.

2.    Citizens of third countries other than those listed above can only enter Hungary in passenger traffic with special permission of the police where there is a legitimate reason. The request may be submitted electronically, in Hungarian, on the police website.

3.    Covering the nose and mouth (i.e. wearing a mask) continues to be mandatory on public transport and in retail premises. Wearing a mask is not required for guests on premises of restaurants and bars.

4.    Both indoor and outdoor music and dancing events can be held for under 500 participants. This means that cinemas and theatres may reopen. The exact date of reopening will be determined by the venue operators. For theatres the necessary preparations might mean reopening will take longer than cinemas.

Declaring an emergency

The rules for declaring a public health emergency and further restrictions are summarised below.

The declaration must be ordered by the Government upon the national chief medical officer’s recommendation

This must be justified by:

·        an epidemiological emergency; or

·        any event seriously endangering or damaging the life, health or physical integrity of citizens or the operation of healthcare providers;

·        a circumstance that seriously and directly impedes healthcare for the population in care of a medical institution.

It is effective for six months at most, except if its term is extended by the Government. The national chief medical officer will continuously monitor the existence of the conditions justifying the state of emergency, and if they are no longer present, initiate (through a ministerial proposal) the repeal of the Government Decree declaring the public health emergency.

A state of emergency can be declared for certain parts or the whole of Hungary.

If justified, the Government may create an Operational Group, which can then set up a watch centre and task forces.

Possible further restrictions

Through its decrees, the Government may restrict or prohibit the following (among others):

·        operation of institutes and facilities, attending and organising events, performance of activities;

·        operation and opening hours of businesses;

·        passenger transport, transportation of live animals and goods between certain parts of the country or between Hungary and other countries;

·        personal, physical contact between people;

·        selling or consuming certain products;

·        use of health services;

·        consumption of drinking water;

·        keeping certain animals;

·        transport`;

Action can also be taken in the following areas:

·        use and supply of medicine, medical accessories, healthcare services;

·        preserving the condition of medical supplies;

·        rules on social distancing, wearing protective equipment and establishing shopping time slots;

·        public and higher education;

·        epidemiological quarantines;

·        delivery of goods.

Simultaneously with the measures described above, the Healthcare Act has been supplemented with rules for ‘Official home quarantine’ (Section 67/A), ‘Searching for a person to enforce epidemiological measures’ (Section 70/B) and ‘Other epidemiological measures’ (Section 74/B).

Enormous data protection fine imposed by the HDPA

Company groups, Data protection, Medium-sized companies, News, Start-ups / / , , , ,

On 18 May 2020, the Hungarian Data Protection Authority („HDPA” or „Authority”) has imposed a fine of HUF 100 000 000 on DIGI Távközlési és Szolgáltató Korlátolt Felelősségű Társaság („Digi” or „Company”).
The decision has been published by the Authority today, which is by far the highest amount imposed since the GDPR’s entry into force and the existence of the HDPA. The facts leading to the fine and the subsequent decision of the Authority are summarized as follows:

Facts of the case

1. Due to a prior loss of data, Digi created a test database for the purposes of mitigating errors, which the Company filled with existing personal data. The test database was originally available on the Company’s website only with appropriate authorization.

2. The content management system (‘CMS’) applied by the Company had a vulnerability, which has been detected more than 9 years ago. This vulnerability can also be detected and amended automatically by adequate tools and applications. Through this vulnerability, anyone could view the test database without access authorization.

3. Exploiting this vulnerability, an ethical hacker gained access to the test database, where the personal data of a significant number of clients were stored in plain text without any encryption. These data included all personal identifying data, ID card numbers, and in some cases personal identification numbers, e-mail addresses, telephone numbers and bank account numbers were also included.

4. In addition to the above, data of newsletter subscribers and full access system administrators were also accessible through the vulnerability, which could have been used by an attacker to take over complete control of the website and access any personal data or trade secret available on the website.

Findings of the HDPA

• The categories of personal data involved made identity theft possible for a potential attacker.

• It is also an aggravating circumstance that the number of people affected by the data protection incident is significant, even in relation to the entire population of Hungary, the Company’s market position would have justified the application of more serious data security measures.

• The vulnerability in the open source content management system has been known for a long time, and a fix is available to fix this vulnerability for free.

• Lack of encryption increased the risk of the incident, even though the Company would also have had the opportunity to encrypt its data for an insignificant cost.

• Leaking access credentials for full system administrators severely increases security risk.

• The maintenance of the test database violated the principles of the GDPR, as the test database should have been permanently deleted once its purpose has been fulfilled.

• The Company has also violated the provisions of its own internal regulations.

In light of all of the above, the Authority considered that the warning would not have had sufficient deterrent effect and that a fine, the exceptionally high amount of which was explained by a number of aggravating circumstances, was justified.

Deductions from the corporate tax base during the state of emergency

Company groups, Corporate law, Medium-sized companies, News, Start-ups / / , , ,

On 30 April 2020 another tax relief has been published with regards to the state of emergency.
This time, the provisions of tax base deductions set out in Act LXXXI of 1996 on Corporate Tax and Dividend Tax are extended in the tax years during the emergency and in the taxpayer’s choice in the tax year 2019 as well, in accordance with the following:

1. The pre-tax profit is reduced by the amount of earnings retained and transferred to the reserve in the tax year by the corporate taxpayer and shown as a reserve on the last day of the tax year, but not more than the pre-tax profit and up to HUF 10 billion per tax year (“development reserve”). Prior to the tax relief, the development reserve could not exceed 50% of the taxpayer’s pre-tax profit for a given tax year, this restriction does not apply under the new rules.

2. If the taxpayer chooses to apply the new rule to the 2019 tax year, but has already submitted its 2019 tax return by 1 May 2020, it may form a reserve for the 2019 tax year in accordance with the rules of accounting control within a self-revision procedure. until 30 September 2020.

3. If the tax return has not yet been submitted, but the taxpayer already has an approved financial statement, it may form a reserve for the approved report in accordance with the rules of accounting control.

 

Certain Tax and Corporate Deadline and Processes

Company groups, Corporate law, Medium-sized companies, News, Start-ups, Trade affairs / / , , , , ,

During the state of emergency and the implemented partial curfew, the continuous decision-making of companies could easily become impossible. In order to prevent this, as of 11 April 2020 different rules apply to the decision-making process of the obstructed companies, and the mandate term of certain company officers is also extended for this period.

By definition, the decision-making rules do not apply to companies not obstructed by the exceptional circumstances, for example in the case sole member companies.

During the emergency and until the 90th day after its end, the term of managing directors, board members (e.g. supervisory board members) and auditor may not be terminated as a result of expiration or resignation and these officers shall continue to carry out their duties during this time. This provision also applies to unhindered companies, but of course it is also possible to elect new officers during the state of emergency.

A new rule to be applied to all taxpayers is that the deadline for preparing, disclosing, depositing, publishing and submitting financial statements of the Accounting Act due after 22 April 2020 is extended until 30 September 2020. In the case of the main types of tax (corporate and dividend tax, small business tax, local business tax, etc.), the tax assessment, declaration and payment obligations, as well as the tax advance assessment and declaration obligation to be fulfilled simultaneously with the annual tax returns can also be fulfilled by this extended deadline.

Wage Aid Provided For Reduced Working Hours Changed

Employment, labour law, Medium-sized companies, News, Start-ups / / , , , ,

On 29 April 2020, beneficial changes enter into effect in the aid provided for reduced working time employment.
The wage subsidy may be requested if the reduced working time reaches at least 25% and at most 85% of the previous working time, and no longer has to reach 4 hours a day.

The amount of the maximum wage subsidy depends partly on the lost working time and partly on twice the net minimum wage, therefore the maximum wage subsidy available increased to HUF 112,350 according to the decree, contrary to statements made in the media, according to which the maximum amount remains unchanged.

Further good news is that there will be less administration, an agreement on the incomprehensible individual development time is only mandatory if the reduced working hours exceed half of the previous working hours, and wage subsidies may now be granted for home office work, remote work, temporary agency work and during the working time frame.

Headcount maintenance and not ordering extraordinary working hours (overtime) will only apply to employees receiving the wage subsidy.

Unfortunately, the most uncertain circumstance has not been removed from the requirements, as employers still have to credibly prove the undefined ‘interest of national economy’ to retain employees.

Aid Provided To Employment Is Very Limited

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The Hungarian government announced that they are going to wage support the wages to those employees that who are still able to work.
The the maximum amount of Wage Subsidy shall be HUF 74,900 / employee. However, in order to request the employee and the employee jointly shall apply for the wage subsidy on cinditionsconditions that they both comply with even the company has to meet certain extensive criteria and which this further limits it’s use. The employers must also present its measures taken or is expected to take to overcome the economic difficulties and to exhaust the working time available for rescheduling work and that is operation is a national interest which is undefined category at the moment. Application for the Wage Subsidly may be submitted from the 16th of April 2020. In order to be eligible compliance with the strict requirements must be substantiated by fully comprehensive and detailed documentation. Should an application refused by the authority, no appeal or any legal way is allowed.

Government decree containing further derogations from the labour code for example:as the employers can unilaterally introduce a framework of working time up to 24 months.

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