Coronavirus Update: Regulations related to taxation released
The immediate measures adopted with a view to alleviating the economic effects of the coronavirus epidemic have been published in Magyar Közlöny (Hungarian Gazette).
Prime Minister Viktor Orbán announced yesterday that, after taxi drivers, further small businesses and individual entrepreneurs would be granted exemption from the payment of the ‘kata’ flat-rate tax until June 30 due to the coronavirus epidemic.
‘Kata’ liabilities incurred before March 1 will be deferred; similar to tourism and catering, Hungarian media services will be given a tax break due to lost advertising revenues; evictions, confiscations and tax-related executions will be suspended; and during the state of emergency, various maternity entitlements will be extended.
According to the detailed regulations related to taxation, the laws on the social contribution tax, the flat-rate tax of small taxpayer businesses and the tax of small businesses will be amended, while there is an itemised list extending to twenty-six activities which come under the tax breaks or exemptions granted.
The decree lays down that taxpayers engaged in the specified activities will be exempt from the payment of ‘kata’ – the flat-rate tax of small taxpayer businesses – for the months of March, April, May and June 2020.
Exemption from the payment of tax will not affect entitlement to social security services and the amounts thereof.
Any ‘kata’ tax debts incurred before March 1, 2020 of small taxpayer businesses that came under the effect of the legislation in February can be paid in 10 equal instalments – each instalment by the 12th of the subject-month – from the month following the quarter in which the state of emergency is lifted.
From March 1, 2020, the state tax authority will not charge any penalties in relation to tax debts up to the month following the quarter in which the state of emergency is lifted and for the duration of payment by instalments.
If a taxpayer fails to pay a due instalment, they will forfeit entitlement to the preferential arrangement and the debt will fall due in one sum.
Taxpayers subject to the payment of tourism development contributions who are required to declare tourism development contributions quarterly must establish, declare and pay the tourism contributions relating to the period between January 1, 2020 and February 29, 2020 in their tax returns to be submitted by April 20, 2020, while those required to submit declarations annually must establish, declare and pay the tourism development contributions relating to the periods between January 1, 2020 and February 29, 2020 and between July 1, 2020 and December 31, 2020 in their tax returns to be submitted by February 25, 2021.
According to the regulations, from April 15 the limit of contactless card purchases authorised without a PIN number will increase to HUF 15,000. As a result, according to estimates, in almost 90 percent of purchases customers will not be required to touch POS terminals.
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