Extension of social security contribution reliefs, reduced rehabilitation contribution
The new package involved further sectors to exempt from social security contribution liabilities both from employer’s and employee’s perspectives. This means that the employer part of social security contribution (17,5%) and vocational contribution (1,5%), as well 14,5% of the employees’ social security contributions (i.e. only the 4% health care social security contribution up to the limit of 7.110 HUF/month is due) should be not paid for the period of March-June 2020. We should highlight that currently the payment of personal income tax is still upheld.
Businesses from the below sectors subject to rehabilitation contribution (HUF 1,449,000 per person) are entitled to pay only 2/3 part of their liabilities during the emergency period, no contribution advances are neither applicable.
In case of taxpayers opted for small business tax (called in Hungarian ‘KIVA’),the tax base for the emergency period should not include the employees’ costs.
The sector concerned, by indicating the relevant NACE/CPA codes (provided that at least 30% of income derived from these activities in the previous 6 months):
- taxi drivers (49.32)
- accommodation services (55)
- catering (56)
- creative, arts and entertainment activities (90)
- sport, amusement and recreation services (93)
- gambling sector (92)
- film-related services (motion picture, video and television programme production services, sound recording and music publishing, 59)
- conference and trade show organization 82.30
- media sector (publishing of newspapers, journals and periodicals 58.13 and 58.14; programming and broadcasting activities 60)
Tax exemption and deferral for small businesses
Similarly to the taxi drivers, an additional 81,480 small businesses in further sectors grant tax exemption from the obligation to pay small taxpayers’ itemized lump-sum tax (called in Hungarian ‘KATA’) until June 30 2020, thus the following sectors are subject to the tax reliefs (indicated by relevant NACE/CPA codes and provided that at least 30% of income derived from these activities in the previous 6 months):
- taxi drivers (49.32)
- hairdressing and beauty treatment (96.02)
- healthcare-related services (other human health care 86.90; physical well-being activities 96.04; specialist medical practice services 86.22; general medical practice services 86.21; dental practice 86.23; hospital services 86.10; care for elderly and disabled people 88.10)
- sport-related services (sports and recreation education 85.51; other sports activities 93.19; fitness facilities 93.13)
- construction and repair services (painting and glazing works 43.34; electrical installation work 43.21; plumbing, heat and air-conditioning installation works 43.22; joinery installation 43.32; floor and wall covering 43.33; roofing 43.91)
- performing arts 90.01; other performing art support activities 90.02
- tourism sector (hotel accommodation 55.10; holiday and other accommodation services 55.20, 55.90)
- event organization sector (conference and trade show organization 82.30)
- other catering 56.29
- gambling 92.00
In the above sectors, KATA debts incurred before 1 March are also deferred, resulting in that the taxpayers concerned are allowed to arrange their relating tax payments, without any surcharges imposed, in 10 equal instalments in the quarter following the end of the state emergency.
Details of tourism development contribution relief
In line with the previous measures, it is regulated that the 4% tourism development contribution should be not reported and paid in the relevant quarterly or annual return for the period of March-June 2020.
Moratorium on tax executions
All evictions and property seizures, as well as tax execution procedures, are suspended until the 15th day following the end of the emergency. The remaining tax debts will be sufficient to be paid after the end of the state emergency.
Supports of families
Child car allowances and child care benefits that expire during the emergency are extended to exist to support the liquidities of families.