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Extension of protective measures in Hungary

Extension of protective measures applicable during the period of state of emergency

I. According to the Government Decree 27/2021. (I. 29.), the Government has once again declared a state of emergency in the entire territory of Hungary from 8 February 2021, which is expected to last until 23 May 2021 according to the Act I of 2021 on the Prevention of the Coronavirus Pandemic, which entered into force 22 February 2021. During this period, the Government may decide on additional extraordinary measures by decree. 

II. The Government decreed on the extension of protective measures applicable during the state of emergency by Government Decree 80/2021. (II. 22.). Under the Decree, the emergency measures are expected to remain in force until 23 May 2021.

Please note, that depending on the change of the epidemic situation, the state of emergency may be extended by the Government or re-announced at a later date, additional restrictions may be introduced, or certain restrictions may be maintained even after the state of emergency.

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New COVID-19 restrictions in Hungary: consequences for employers

The restrictions (of Gov. Decree 484/2020 (XI. 10.)) apply as of 11 November 2020 for the whole of Hungary, effective until 11 December 2020. These restrictions may be prolonged if necessary.
The current rules concerning wearing masks, social distancing and border crossing remain in effect, while wearing masks is now obligatory in public spaces designated by the local councils in cities exceeding 10,000 inhabitants.

I. Curfew between 20:00 and 5:00 with an exemption regarding going to work

During the curfew, only people going from their homes (place of residence) to work and back home from work can be in public spaces. A sample of the certificate to be issued by the employers can be found on the Government website: https://kormany.hu/hirek/kijarasi-tilalomrol-szolo-igazolas

II. Rules regarding education

Nurseries, kindergartens and primary schools remain open for those under 14 years of age. Online education has been introduced from grade 9 in middle schools and colleges/universities, and dormitories are closed.

III. General ban on events

All events are banned. This also applies to all professional events held in person (conferences, workshops, etc.).

IV. Restrictions on trade and catering

Restaurants are closed and only takeaway and home delivery are allowed, however, factory canteens may remain open. Shops, stores and other services except for pharmacies and petrol stations must close at 19:00, after which only those working there may stay on site. Hotels may only accommodate guests arriving on business, economic or education purposes.

V. Sanctions

In the event of violation of the rules applicable to events or institutions, shops and facilities, the police may close the area, premises or institution (except for educational institutions) for a period of one day to one year and impose a fine of HUF 100,000 to HUF 1,000,000.

VI. Economic protection measures

In order to protect jobs, the Government has also introduced economic protection measures (Decree no. 485/2020. (XI. 10.)), as follows.

1. Tax allowance
For November 2020 employers operating in the scope of activity listed in the Decree shall not need to pay social contributions and vocational training contributions. Small entrepreneurs within the scope of activity listed in the Decree do not need to count personal payments to their small business tax base relating to employees who would have been dismissed due to the state of emergency, provided that these employees are not dismissed and receive their salaries.

2. Provision for hotels
The state will reimburse 80% of the price (net income) of bookings booked for within the next 30 days and received by the hotels registered in the National Tourism Data Providing Centre (Nemzeti Turisztikai Adatszolgáltató Központ) until 8 November 2020, provided that the hotel employees are not dismissed and receive their salaries.

3. Wage subsidies
50% of the wages for November 2020 of the employees of restaurants and leisure facilities listed in the Decree will be reimbursed by the state in the form of a subsidy, provided that the employees are not dismissed and receive their salaries.

The ‘actual main activity’ is the activity which generated the most revenue, which must be at least 30% of the revenue in the previous six months.

There are still many open questions regarding the implementation of the governmental measures described above, we shall provide information on possible further measures after they have been published.

Travel restrictions extended again

Please note that by adopting Gov. Decree No. 469/2020 (X.29.) the Hungarian Government has extended the travel restrictions and border control again until 1 December 2020.
Entry to the country shall remain to be subject to restrictions or otherwise allowed only in exceptional cases in line with the previous communications.
Should there be any change concerning the travel restrictions or entry to the country, we will provide further information.

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

 

Exemption from work during adoption

Pursuant to the amendments of Act I of 2012 on the Labour Code (“Labour Code”) effective as of 1st September 2020, the employee shall be exempted from the requirement of availability and from work for a maximum of 10 working days per year during the period of preparation for adoption.

The pre-adoption phase provides an opportunity for parents intending to adopt and the child to be adopted to meet, introduce themselves and start to get to know each other before the adoption. Also during this period, the living conditions of the parents wishing to adopt will be assessed, counseling will be provided by the child protection service and, if required, a free adoption course will be conducted.
As the procedure involves a number of tasks for the employee, the legislator considered it necessary to exempt the employee from his/her requirement of availability and work during this period.

The exemption is available to both prospective parents, who are entitled to an absence fee for this period. The exemption shall also apply in the case of an executive employee, from which the employment agreement of the executive employee may not deviate.

The conditions for claiming the exemption are defined by the Labour Code as follows:
– exemption from availability and work is possible on the basis of a certificate issued by the adoption organization;
– the employee may claim the exemption within 90 days following the issuance of the certificate;
– the employee shall inform his/her employer at least 5 working days in advance of his/her intention to claim the exemption;
the employee must be exempted on the dates specified in his/her request, therefore it is up to the employee to determine the dates;
– the Labour Code does not stipulate that the exemption of 10 working days should be granted to the employee only continuously, therefore the employee may request that the exemption be granted in several installments within 90 days from the issuance of the above-mentioned certificate.

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

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

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!

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.

Enormous data protection fine imposed by the HDPA

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

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

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

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.

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