Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure HU-2020-10/654 – Updated – measures in Hungary
|Country||Hungary , applies nationwide|
|Time period||Temporary, 01 March 2020 – 30 April 2021|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Direct subsidies (full or partial)
|Author||Nóra Krokovay (KOPINT-Tárki) and Eurofound|
|Measure added||15 April 2020 (updated 15 June 2022)|
Under §.3. - §.5. of the government decree 47/2020. (III. 18.) a selected group of businesses will receive relief from certain types of taxes in the months of March-June 2020. The reason for the measure is specified in the title of the decree: “immediate measures necessary to alleviate the impacts of the coronavirus pandemic on the national economy.” The main target is to help employees working in sectors that are hard-hit by the pandemic.
Businesses eligible are those active in the following sectors: tourism, catering, entertainment, gambling, film industry, live performance, event organiser and sports activities and passenger land transport services (taxi services). Self-employed and microcompanies paying the KATA flat tax for small entrepreneurs will be exempt from the tax in the period of March to June 2020. The KATA tax includes social insurance tax, and the entrepreneurs choosing to get this assistance can still stay insured. In addition, a freeze will be applied to any KATA arrears accumulated before 1 March 2020 until the end of the 'state of emergency' announced by the government on 11 March. 82,000 KATA-registered businesses paying HUF 25,000, 50,000 or 75,000 per month (depending on what category they are in) may be recipients of the tax relief. A rough cost estimate: HUF 12 billion in total if most entrepreneurs take advantage of the measure.
This is an automatic measure, so the 81,000 KATA registered entrepreneurs will be exempt from the tax for the designated months. After the circle of sectors was extended, the relief affects about 120,000 solo entrepreneurs in 2021. The only alternative is to suspend business activities even beyond the period of the tax relief, as when suspended, no taxes are due.
Sector specific set of companies
||Does not apply to citizens|
Company / Companies
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
The Music Hungary Association, an umbrella organisation for the music sector, lobbied the Finance Ministry for re-introducing KATA relief in November 2020, as lockdowns deeply affected the music sector. In its answer in January 2021 the Finance Ministry suggested that musicians suspend their business activities for the time when no concerts can be held. KATA is generally chosen by small entrepreneurs or freelancers (40% of KATA-registered businesses earned below HUF 4 million or €11,000 a year from their activities in 2019) so their representation in social dialogue is especially weak.
The journalists' association MÚOSZ demanded that journalists and photographers are included in the circle of activities where the relief from KATA payments applies.
|Economic area||Sector (NACE level 2)|
|F - Construction||F43 Specialised construction activities|
|H - Transportation And Storage||H49 Land transport and transport via pipelines|
|I - Accommodation And Food Service Activities||I55 Accommodation|
|I56 Food and beverage service activities|
|N - Administrative And Support Service Activities||N82 Office administrative, office support and other business support activities|
|Q - Human Health And Social Work Activities||Q86 Human health activities|
|Q88 Social work activities without accommodation|
|R - Arts, Entertainment And Recreation||R90 Creative, arts and entertainment activities|
|R92 Gambling and betting activities|
|R93 Sports activities and amusement and recreation activities|
|S - Other Service Activities||S96 Other personal service activities|
This case is not occupation-specific.
Eurofound (2020), Relief of ‘KATA’ small entrepreneurs’ tax for certain target sectors hard-hit by the Coronavirus pandemic, measure HU-2020-10/654 (measures in Hungary), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HU-2020-10_654.html
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