NEWSROOM

Changes related to the local business tax in Hungary

According to the changes of the act of the local business tax adopted on 26 November 2020, taxpayers have to submit their tax return to the tax authority, which means that what was an option until the end of the 2020 year, has become an obligation. As of 1 January 2021, the tax authority supervises and verifies the tax returns and also indicates immediately the calculation errors to the taxpayers, which can be corrected by correction or self-audit. It is also worth mentioning the temporary reduction of the local business tax rate as a part of the recovery measures introduced as a result of the economic difficulties caused by COVID pandemic. In the tax year ending in 2021, the entrepreneur – as defined in the act of the local business tax – with a net turnover or balance sheet total not exceeding HUF 4 billion (micro-, small- and medium-sized enterprises) has to pay no more than 1% local business tax (instead of the maximum of 2%). The entrepreneur covered by the rules should pay 50% tax advance due on the given advance payment dates. A special declaration must be submitted to the local government to take advantage of this tax reduction until 25 February 2021.

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European Union bans the plastic waste export to non-OECD countries

With Regulation 2020/2174 the European Commission adopted new rules on the export, import and intra-EU shipment of plastic waste, which has banned all non-recyclable plastic waste being shipped to developing nations from 1 of January 2021. In the last decade, uncontrolled trade in plastic waste has increased, damaging both the environment and public health. The new Regulation’s main objective is to end the export to developing countries, which do not have the adequate capacity to process and dispose the plastic waste. As a result, the export of unsorted plastic waste to non-OECD countries will be completely banned. Exporting hard to recycle plastic waste and hazardous plastic waste from the EU to OECD countries will be subject to the “prior notification and consent procedure”. Under this procedure, both the importing and exporting countries must authorise the shipment. The procedure will be the same for those importing plastic waste into the EU. The Regulation’s main objective is also in line with the European Green Deal and the Circular Economy Action Plan, which will both increase the reuse of plastics in the industrial sector. Europe’s war on plastic is a rational scenario, since every year, Europeans generate 25 million ton of plastic waste, but less than a third (30%) is being recycled. Therefore, to reverse that direction, under the new plastic strategy, all plastic packaging in the EU will be recyclable by 2030, the consumption of single-use plastics will be reduced,

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Trade negotiations between China and the EU have been concluded

Seven years of trade negotiations between the European Union and the People’s Republic of China ended with a Comprehensive Agreement on Investment (CAI) on 30 December 2020. “It will provide unprecedented access to the Chinese market for European investors, enabling our businesses to grow and create jobs. It will also commit China to ambitious principles on sustainability, transparency and non-discrimination” - said Ursula von der Leyen President of the European Commission. Under the CAI, China is expected to provide easier access – especially on manufacturing – to its market for European investors while providing less strict rules for European companies in relation to the transfer of subsidies or forced transfer of technologies. Another part of the deal is that China committed itself to reduce forced labour and even has to adopt some of the rules of the International Labour Organisation’s fundamental Convention. The agreement also requires China to effectively adopt the rules of the Paris Climate Agreement, which is a great step, as China is the largest emitter of carbon dioxide. The conclusion is the first step, as the adoption of the CAI and further finalisation work still have to be done. As part of the deal, the two parties have committed themselves to try to reach an agreement on dispute resolution and investment protection in two years’ time to even strengthen the effect of the CAI.

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The Equal Treatment Authority will be abolished from 1 January 2021

On 1 December 2020 the Hungarian Parliament decided that as of 1 January 2021, one of the most effective bodies in the fight against discrimination, the Equal Treatment Authority (ETA) will be abolished.

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The termination of undivided joint ownership may be initiated only from 8 February 2021

The act on the termination of the undivided joint ownership on lands (and on the clarification of the data of the rightholders of properties deemed agricultural land in the land registry) will enter into force on 1 January 2021.

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Six-point action plan to ease finances in Hungary

Minister of Finance, Mihály Varga announced in November 2020 a new, six-point action plan designed to make payments and navigating red tape easier and cheaper in Hungary, as follows:

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Facebook’s new cryptocurrency Diem is close to launch

Facebook – the third most visited website in 2020 and the number one social media platform – is developing a new cryptocurrency, which is estimated to launch at the beginning of 2021.

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Companies can sue foreign "giants" domestically

The Court of Justice of the European Union (CJEU) has ruled in favor of domestic companies: for a damage claim resulting from an infringement of competition even the largest foreign platforms can be sued in the Member State of the company with which they enter into contract.

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The Posted Workers Directive is applicable in the road transport sector

The Court of Justice of the EU (CJEU) clarified in its decision published on 1 December 2020 that the Posted Workers Directive 96/71/EC should be applied to drivers in the international road transport sector.

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„Right to repair” – the planned new right of EU citizens

The European Parliament intends to contribute to sustainability by strengthening consumer protection and enhancing product safety.

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