On 18 March, the Hungarian Government introduced amendments to tax and social security law as a response to the economic effects of the coronavirus outbreak. This bulletin summarizes the most important of those changes.

Social security

Modified social security rules shall be applied for the period of March-June 2020 to the following sectors:

• Hospitality and tourism;
• Entertainment, film industry, performing art;
• Sport services;
• Event organization;
• Gambling.

The rules for social security contributions in the above sectors have been amended as follows:

• Employers will not be liable to pay their part of social security contributions (17.5%+1.5%) with respect to employment income provided by them in the March-June 2020 period.
• Employees will only be liable to pay 4% healthcare social security contribution on the employment income received in the March-June 2020 period, instead of the aggregated 18.5% social security contribution. Nevertheless, the upper limit of the above healthcare social security contribution will be HUF 7,710/month. It should be noted that personal income tax will be still payable.

Simplified lump-sum taxation amendments

Special rules will be applicable for entrepreneurs dealing with passenger transport who opted for simplified lump-sum taxation (known as ‘KATA’ in Hungarian). Based on the amendments such entrepreneurs are not obliged to pay lump-sum tax in the March-June 2020 period.

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