From 2021, the rules on warranty for consumer durables (e.g. household appliances, kitchen appliances, gas appliances) have been comprehensively modernised. As a result of the changes, businesses must repair or replace defective products under warranty within a short period of time. In addition, the instrument for enforcing repair and replacement claims, i.e. the warranty certificate has also been affected by the amendments in September 2021. The Ministry of Innovation and Technology (ITM) created a warranty certificate template with a content agreed with trade associations to support the undertakings in their compliance.
EU Approves Regional Aid Map for Hungary for 2022-2027
The regional aid map is a legal provision that sets the maximum amount of state aid that can be granted as investment aid to companies investing in certain regions of the country, or in the case of developed regions, smaller territorial units.
Tax-free Minimum Wage
A bill to exempt the minimum wage from personal income tax in order to reduce the tax burden on low wages was submitted to the Hungarian Parliament on 20 September 2021. The proposal aims to amend the Personal Income Tax Act. According to the preamble of the bill, the exemption is necessary, since the income of minimum wage earners is increasingly falling behind average earnings and the total tax burden on wages is one of the highest in Europe.
Expected Changes in Hungarian Taxation as of 2022, Personal Income Tax Refund to Families with Children
Extended loan moratorium, tax return for families, exemption for personal income tax for young adults under 25, new pension premium are the most important tax changes in connection with the central budget as off 2022.
Hungary to Join Global Minimum Tax Deal
Hungary joins global minimum corporate tax agreement, as Mihály Varga, Finance Minister on Hungary announced on 8 October 2021. Mr. Varga highlighted three key points of the deal for Hungary.
Solar and Renewable Energy Sector to Benefit From Residential Solar Tender for Hungary
The draft of a huge EU solar tender for the residential sector was published by the Hungarian Government at the end of August 2021. The draft proposal shows that households earning less than the national average income will be eligible for 100% non-repayable grants of between HUF 3-11.5 million (EUR 8,500 – 31,500) for green investment purposes.
Curia’s Unity Decision on the Transfer of Contracts
The Curia has made a legal uniformity resolution no. 7/2021 PJE on the enforcement of the rules of contract transfer. The resolution has been trying to put an end to the issues of contract transfer, especially in the case of agricultural leases. The previous legal practice was based on the interpretation that the contract shall be deemed to be a new contract in respect of all rights and obligations transferred.
Changing Company Rules in the Hungarian Civil Code
With respect to the evaluation of the success of the incorporation of certain provisions of the Hungarian Civil Code in the practice and the regulatory proposals developed by the case law, the amendment of the Civil Code has become necessary, therefore, at the end of June 2021, an act amending the Hungarian Civil Code has been published.
New Synthetic Securitisation Instrument is Approved by the European Commission
The European Commission approved the creation of a new synthetic securitisation product under the EU State aid regulation. The new product is in the form of guarantees on synthetic securitisation tranches to help companies affected by the COVID-19 outbreak in the 22 participating Member States (i.e. Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Lithuania, Luxemburg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain and Sweden). The product is under the European Guarantee Fund and managed by the European Investment Bank Group (EIB Group). The dedicated budget is EUR 1.4 billion, however, it is expected to mobilise at least EUR 13 billion of new lending to companies affected by the COVID-19 outbreak.
Remote Working vs. Home Office in Hungary
Legislation concerning remote work is once again in the spotlight, as Government Decree 487/2020. (XI. 11.) on the application of teleworking rules during the state of emergency modified the provisions of telework as of 3 July 2021. According to the Decree, home office should be considered as remote work during the state of emergency and the provisions of the Decree are applicable instead of the provisions of the Labour Code on remote work.
A “Special” Employee Stock Ownership Plan has been Introduced
The provisions creating the legal framework of the Special Employee Stock Ownership Plan (“Special ESOP”) entered into force on 13 July 2021, providing a new special ownership opportunity for employees or board members of limited companies to acquire stocks at a more favourable rate than before.
The Minimum Wage of the EU Country to Be Paid to Expat Employees
According to a decision of the Court of Justice of the European Union made on 8 July 2021, Hungarian employees can make claims before the Hungarian courts against their Hungarian-based employer for breaching the minimum wage rules of the Member States where they are posted.
Restrictions on the Export of Building Materials
At the beginning of July 2021, a new Government Decree (402/2021. (VII. 8.)) entered into force on the registration procedure of raw materials and products with strategic importance for the security of supply in construction and on other measures. The aim is to control the purchase and export of certain building materials abroad from Hungary. It applies to building materials which are intended to be exported or to be sold abroad from the territory of Hungary, for instance gravel, pebbles, crushed stone, portland cement, bauxite cement, cinder cement, fireproof cements, mortars, concretes, iron bars and wood, however, it is not applicable to building materials supplied in the framework of transit traffic.
Significant Minimum Wage Increase Expected in Hungary
HUF 200,000 might be the new general gross minimum wage from 2022 in Hungary. Informal consultation between the Government and the National Association of Entrepreneurs and Employers has already begun with regard to a new, long-term agreement on minimal wages. The official negotiation process should also be started by 15 September 2021.
Material Compensation for Delay in Civil Proceedings from 1 January 2022
By ratifying the European Convention on Human Rights in 1992, Hungary has committed itself to ensure the right to a fair trial within a reasonable time and to guarantee the right to an effective remedy for any violation of this right. In its judgment in Gazso v. Hungary, the European Court of Human Rights called on Hungary to establish a domestic remedy capable to handle the structural deficiencies identified in the judgment. As a result, at the end of June 2021, a new Act on the Enforcement of Material Compensation for Delay in Civil Proceedings was published in the Hungarian Official Gazette, which will enter into force on 1 January 2022. The Act establishes a new legal remedy for compensation for fundamental rights violations, called ‘material compensation’ which is different from the general compensation (in Hungarian: “kartalanitas”), indemnification or non-pecuniary compensation (in Hungarian: “serelemdij”).
A Single Register of Legal Entities Is to Be Created in 2023
Currently, legal persons and organizational entities are registered by various courts and authorities: companies are registered by the court of registrations, civil organizations by the courts of law, while investment funds, for example, are registered by the Hungarian National Bank. The data content and operation of these registers also differ.
COVID Tax Measures Updated in Hungary
Latest tax reliefs aim to support tourism and travel industry in Hungary, as tourism was one of the most affected sectors by COVID pandemic. In order to boost the restart of domestic tourism, the latest governmental decree of 381/2021 introduced several new tax measures, mainly for this sector. As a result, tourism development contribution of 4% is still not payable by the end of 2021.
Hungary Bans Single Use Plastic Products
On 1 July 2021, a new Government decree enters into force in Hungary, prohibiting the placing on the market of certain single-use plastic products and products made from oxo-degradable plastic. The decree was published in Hungary's Official Gazette on 1 June.