COVID tax measures updated in Hungary

Latest tax reliefs aim to support tourism and travel industry in Hungary, as tourism was one of the most affected sectors by COVID pandemic. In order to boost the restart of domestic tourism, the latest governmental decree of 381/2021 introduced several new tax measures, mainly for this sector. As a result, tourism development contribution of 4% is still not payable by the end of 2021.

Furthermore, amounts received on (and spent from) the so called SZÉP-card enjoy a beneficial tax treatment. SZÉP-card has been introduced back in 2012 as a cafeteria option that can be spent on accommodation, hospitality and recreational services. Payment by the employers to SZÉP-card has preferential tax treatment compared to the general tax rate applicable to salary within the given thresholds (previously HUF 450,000, equivalent to EUR 1,250). In order to facilitate domestic tourism, the preferential threshold is increased, up to the aggregate of HUF 800,000 (EUR 2,200) for the entire 2021 year. Also, these amounts are exempted from social contribution tax of 15.5%, practically decreasing the effective tax rate to half.

Social contribution tax exemption is also applicable for business gifts and ‘representation’ services, covering hospitality (food and beverages) provided during a business, official, trade, diplomatic or religious event in connection with the activities of the provider. Additionally, COVID-specific tax payment reliefs have also been upheld: SMEs may apply for payment in instalments, deferred payment and even partial tax reduction for tax debts under HUF 5 million (approximately EUR 14,000) by the end of 2021.