The Hungarian Government has announced the economy protection action plan in April 2020. The action plan is under revision now, in the following, we summarise the main points of the economy protection action plan as of 20 April 2020:
- New subsidy scheme to improve competitiveness was introduced for medium-sized and large enterprises at manufacturing industry and business service centres. There are sectors which are excluded from this subsidy such as steel sector, coal sector, transport sector, energy production, supply and energy infrastructure projects etc. Only those companies can apply for the subsidy which undertake to implement an investment at least in the value of EUR 150,000 until 30 June 2021 in Hungary, and the investment undertaken by the companies shall not be commenced preceding the submission of application for the subsidy. In addition to this, they shall undertake the maintenance of already existing jobs until the completion of the investment, but at least until 31 December 2020. The amount of the subsidy depends on the volume of the investment but not more than EUR 800,000. Between EUR 150,000 – EUR 300,000, it is 30% of the investment volume, between EUR 300,001 – EUR 500,000, it is 40 % of the investment volume, from EUR 500,001, it is 50 % of the investment value.
- New wage subsidy scheme to maintain jobs was introduced, according to which, the state undertakes to pay a certain part of wages for a period of 3 months if the companies undertake to keep their headcount and only reduce the working time. Companies shall file a formal request for this subsidy and they shall meet strict requirements. The amount of the subsidy depends on the reduction in wages and working hours, however, the reduction in wages and working hours shall not exceed 75 %, the amount of the subsidy is maximised in the amount equal to 70 % of lost wages, but not more than twice the minimum wage.
- Administrative burdens and taxes are being reduced;
- VAT refunds are promised to be accelerated;
- Moratorium on instalment payments of loans was introduced (repayment moratorium) which shall be effective until 31 December 2020 (unless prolonged). Neither during nor after the period of the payment moratorium shall the principal be increased by the amount of the interest not paid during the period of the payment moratorium; the contractual period shall be extended accordingly.
In addition to the above, in the sectors hardest hit by the crisis – among others tourism, catering, gambling – further measures were taken:
- lease contracts for premises not to be used as flats shall not be unilaterally terminated by 30 June 2020;
- employers shall be exempt from public dues payable after the wage of employees employed;
- from among the contributions payable after the wage of employees employed, only the obligation to pay in-kind health insurance contribution shall apply, with the provision that its monthly amount shall not exceed the monthly amount of HUF 7710 (app. EUR 22) of the health service contribution;
- persons liable for payment of tourism development contribution shall not be required to pay such for the period between 1 March 2020 and 30 June 2020.
Finally, we note that the Hungarian Government has just announced the introduction of a loan for employers which can be used for the payment of wages for 9 months with a 0,1-interest rate. The details and conditions of the loan have not been determined/announced yet.