COVID-19: Useful Information and Economic Relief

  • May 11, 2020
We have compiled the latest credible news and updates for the business community and the general public. We will continuously update this page with new information as the situation develops.

Coronavirus Situation in Hungary

(as of May 28)

Infected Deceased Recoveries Tested Mandatory Home Quarantine
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State of Danger was declared by the government on March 11, 2020.

On April 30, PM Orbán announced that the country will gradually reopen as the second phase of the defense against COVID-19 has begun. From May 18, restrictions are lifted in Budapest as well, but social distancing measures will continue to apply.

RESTRICTIONS

On March 27, a countrywide restriction on movement was ordered between March 28 and April 11. The order was extended on April 9 and lifted on April 30 with the exception of the capital and Pest county. Restrictions will be eased in Budapest and Pest County from May 18.

  • A compulsory 1.5-metre distance must be kept from others in public areas across the country.

  • It is mandatory to wear a mask or face cover when shopping or using public transportation.

  • From May 4, all shops and stores can reopen in the countryside. From May 18, all stores and shops can reopen in the capital.

    Please note that between 9 a.m. and 12 p.m., only people aged 65 and over can enter grocery stores, pharmacies, drug stores. Others can enter the store before and after this period.

  • Record offices, government agencies remain open. In Budapest, you must schedule an appointment. You are recommended to use e-services instead.

    Expiring official documents (i.e. ID, driving licence) are extended to 15 days after the state of danger is ended by the government.

  • Post offices are open, but you are kindly requested to wear a mask or face cover. Expect delays in international deliveries.
  • Public areas and parks can also be visited while maintaining the compulsory 1.5 metre distance from others. Playgrounds can also reopen.

  • Restaurants, cafés and bars are open.

  • Municipal government can decide on the opening hours of the markets operating in their area. During opening hours, a time period should be set during which the market can only be visited by people over 65 years of age.

  • Higher education institutions can be visited by the students according to the policies set by the rectors. Dorms remain closed.

  • Open-air baths, spas, beaches, museums and zoos can reopen.

  • Cinemas, museums, cultural facilities, theaters, clubs remain closed.

  • Schools and universities are closed.

  • Sporting events can be held indoors and outdoors with spectators. Amateur and mass sports are now allowed to be organized.

  • Family events and weddings of less than 200 people can be held in Budapest from 15 June 2020. Please check with your local municipality regarding local restrictions.

 


Contingency and Economic Relief

In the following segment, we summarize the government's economic relief measures since the outbreak - including the economy protection plan.

  • Loan payments are suspended until the end of the year for all private individuals and businesses

  • Short-term business loans are prolonged until 30 July

  • Sectors heavily impacted by the coronavirus outbreak such as tourism, hospitality, entertainment, sports, cultural services, transportation, will be exempted from paying social security contributions. Only healthcare contributions must be paid with the amount limited to 7710 HUF.

    Landlord are forbidden from terminating non-residential rent contracts or increase rent for businesses in the heavily impacted sectors.

  • Private entrepreneurs performing passenger transport services under the so-called "KATA" tax regulation will not have to pay their flat tax from March to June.

  • Flexible labor regulations: some provisions of the 2012 Labour Code were suspended until the 30th day after the end of the state of emergency.

  • Contactless payment limit raised to 15000 HUF

  • The defense ministry has confirmed that teams from the Hungarian Armed Forces are being deployed to help 84 strategic companies to ensure the continued supply of good and services to the public.

  • The Hungarian Armed Forces buillt a hospital in a single day in the courtyard of Budapest’s St. László Hospital to pre-screen patients so that they can be assigned to the best possible care as quick as possible.

  • Healthcare workers receive a free pass for all long-distance public transport services in Hungary and BKK services in Budapest.

  • Parliament grants extended emergency powers to the government to contain COVID-19 allowing extraordinary measures by decree to ensure the health and safety of the people as well as the stability of the national economy on March 30. State of danger was also extended.

  • Prime Minister Viktor Orbán announced on April 3 that everyone working in healthcare will receive a HUF 500,000 bonus.

  • MIT: Heavy trucks are allowed to travel on domestic roads without weekend restrictions, including on public holidays to ensure the continuous supply of goods.

  • On April 6, Prime Minister Orbán announced a new economic protection plan to preserve jobs, create jobs and support hard-hit sectors.

  • István Nagy, Minister of Agriculture announced new payroll tax breaks to companies in the farm and food sectors hit by measures to contain the spread of the novel coronavirus.

  • Hospitals in Hungary have been ordered to free up half of their beds by April 19 in preparation for a massive increase in novel coronavirus infections.

  • On April 18, the government issued a decree to entitle local governments to announce stricter movement restrictions.

  • From April 20 onwards, Budapest residents must wear masks or face cover on public transportation.

  • From April 27 onwards, Budapest residents must wear masks of face cover when entering grocery stores, markets and other shops.

  • On April 30, Prime Minister Orbán announced that Hungary is entering the second phase of the defense against COVID-19, meaning the country will gradually reopen.

    From May 4, some restrictions are lifted in the countryside.
    The restriction of movement in Budapest is still upheld.

    Practicing social distancing and wearing masks will remain compulsory in shops and on public transportation across the country.


  • On May 8, Péter Szijjártó, Minister of Foreign Affairs and Trade announced that the government has so far helped 9529 Hungarian nationals return from 116 countries across the world since the outbreak. Arrangements are being made to repatriate a further 624 Hungarians.

  • On May 11, the Ministry for Innovation and Technology reported that more than 3950 companies have applied for the kurzarbeit program to help nearly 54000 employees.

  • On May 14, the government announced that restrictions will be eased in Pest County. The Operative Group will make a decision about the capital later.

  • On May 16, PM Orbán announced that restrictions will be lifted in Budapest as well, but social distancing measures must be applied.

    PM says the government expects to give up coronavirus-related special powers at end of May.

  • Ministry of Innovation and Technology announced a HUF 80 billion program to support job creation by offering wage subsidies to companies making new hires. According to State Secretary Sándor Bodó, the program could support 70,000 people finding jobs.

  • Secretary of State for Public Education Zoltán Maruzsa announced that nurseries and kindergartens outside of Budapest will be able to open their doors on May 25.

  • On May 26, the government will submit a bill to rescind emergency powers.

  • Mihály Varga, Minister of Finance outlined the 2021 budget, focusing on boosting the economy, protecting and creating jobs, supporting families and preparing for a resurgence of COVID19.

  • From May 29, restaurants in Budapest are allowed to reopen indoor areas, hotels can reopen. Outdoor sporting and cultural events can also be held, but festivals, indoor music events, concerts are still forbidden.

Economic Protection Plan (April 6)

A new economic protection plan to preserve jobs, create jobs and support hard-hit sectors. 18-20% of GDP will be refocused to drive these efforts

Job Retention

The government introduced a job retention subsidy program based on the German Kurzarbeit model. The government will pay a portion of wages for companies who introduce shortened working hours for three months. 70% of the base salary due for the reduced hours.

  • Reduced hours: extended to 25-85% of the original working hours (min 2 hours a day).
  • Support amount calculated based on the monthly base salary on the day of application. The maximum is HUF 112418 per employee, monthly, net of taxes– depending on the ratio of the reduction in working time.
  • Employer do not need to retain the entire headcount, only those employees who received the aid. Those who receive the subsidy must bet retained during the period of support and a month after its expiration.
  • Employment contracts change automatically by virtue of the government's decree.
  • If the new, shortened work hours are more than 50% of the original working hours, it is mandatory to introduce development plan. If the new working time is below 50% of the original working time, development time is optional. Development time can be scheduled and conducted in the next 2 years.
  • Employers must guarantee to keep the net base salary during the supported period and pay salary for the performance development time.
  • Aid is available for temporary workers, teleworkers and those who are in home office.
  • The employer must submit a joint application with individual employees to the local Government Office’s labor department. Employee consent is a condition for reducing working time and participating in the subsidy scheme.
  • The application can be submitted at any time, even in the middle of a month and it is possible to account for a partial month. The subsidy cannot be claimed for the period prior to the date of submission.
  • Employers do not have to declare the cause of their economic difficulties upon application.
  • The aid is available till December 31 and employers can apply for it during the duration of the emergency or within a month after its ended.
  • Eligible companies must have operated for at least 6 months before the date of application; they cannot be under insolvency, bankruptcy or voluntary liquidation proceedings and cannot receive subsidies in respect of the impacted employees prior to application.
  • Eligible employees must start before March 11, 2020 and remain on payroll. They cannot be on notice, unpaid leave, or under payment obligation to labor authorities.

R&D wage subsidy

In order to maintain research and development capacity, the government will provide a wage supplement for those working in engineering and R&D for three months. The subsidy amount is up to HUF 318,920 per month.

Job Creation

HUF 670+ billion will also be devoted to facilitate job creation:

  • Training and education support
  • Development of industries and enterprises
  • investment support
  • infrastructure developments
  • R&D&I programs

A HUF 80 billion program will be launched to support job creation by offering wage subsidies to companies making new hires. According to State Secretary Sándor Bodó, the program could support 70,000 people finding jobs. Participants in the scheme must commit to employing new hires for at least nine months during which time they will receive wage support funding from the state for six months. Companies will receive a monthly gross HUF 200,000 support per new hires translating into net HUF 112,000 per hire.

Online training will be organised for workers amid the shutdowns. The state will cover 95% of training fees, while job-seekers are entitled to interest-free adult training student loans.

Administrative burdens and taxes are being reduced

  • The social contribution tax will be reduced by 2 percentage points from 17.5 percent to 15.5 percent from July 1

  • The deadline for the submission of tax returns has been postponed to September 30. The extension does not include stock market companies, banks, insurance companies and investment enterprises.

  • The government has also granted a four-month exemption from fixed-rate tax of small (KATA) taxpayers in 26 scopes of activities,

  • The rate of small business tax (KIVA) will be reduced from 12 percent to 11 percent from 2021.

  • The social insurance of workers sent on unpaid leave will not be terminated.

  • Enterprises may request the reduction of any form of tax if they have found themselves in a difficult situation as a result of COVID-19. The maximum level of this reduction is 5 million forints (EUR 14,200). Up to a maximum tax debt of 5 million forints, enterprises may also ask for payment in 12 monthly instalments or a six-month, surcharge-free deferment with relation to all tax forms.

  • VAT refunds will be accelerated; reducing the time limit in the case of normal taxpayers from 75 days to 30 days, while in the case of reliable taxpayers from 30 days to 20 days.

  • Special payment facilities, payment by instalments, deferred payment and tax reduction options are being introduced.

  • The use of the Széchenyi Leisure (SZÉP) Card will become more favourable with a reduced tax burden and a higher spending limit. No social contributions tax will have to be paid with relation to money transferred to the card, meaning the tax burden will be reduced from 32.5 percent to 15 percent.

Recovery

  • MFB Group dedicates close to HUF 1,500 billion to economic recovery launch of harmonized loan, capital and guarantee programs.

    The programs have been developed to counteract the economic impact of the coronavirus epidemic and help relaunch the economy and are slated to offer solutions to the liquidity problems of businesses, preserve jobs, foster investment and development and keep Hungarian businesses in Hungarian hands.

    Including: Crisis Loan Program for micro, small and medium enterprises, Competitiveness Loan Program for SMEs and large companies, Vis Maior Guarantee Program, Crisis Guarantee Program, Hiventures Capital Programs such as Crisis Capital Program, SME Rescue Capital Program and Startup Rescue Capital Program.
  • HUF 2500 billion dedicated to support the most vulnerable and priority sectors (construction, transportation, logistics, tourism, the creative industry, the health industry and the food industry) in the form of investment subsidies, tax reductions, infrastructure development, soft and guaranteed loans and capital program.

  • The health industry will receive significant support.

Other

  • Further support announced to universities and private research institutes for health research.

  • University students will be able to apply for a one-time, any-purpose, interest-free student loan of the amount of HUF 500,000.

  • The Family and Pensioner Protection Program will gradually reintroduce the 13th month pension.

BORDER

As of May 1, Budapest Airport has begun to restart passenger services gradually. Passengers are urged to use online check-in and self-service baggage drop-off, wherever available. Passengers are also advised to arrive early at the airport. Bus 200E operates with an unchanged schedule. The operation of line 100E was suspended on 1 April. For more information on schedules, please monitor the website bkk.hu.

Only Hungarian citizens, the citizens of European Economic Area member states (European Union member states, Switzerland and Norway) entitled to residence in Hungary (and able to attest this right with a residence card) and business people from the Czech Republic, Poland, the Republic of Korea, Germany, Austria, Slovakia and Japan on work purposes are entitled to enter the area of Hungary. The latter passengers must provide evidence that they are traveling on business.

Detailed regulations and precise provisions can be found in the relevant government decrees.

PUBLIC TRANSPORTATION

Public transportation in Budapest remains operational.

  • Passengers must wear a mask or face cover when using the services.

  • Do not get on packed vehicles if possible

  • Please note that you can no longer purchase tickets from drivers. You are encouraged to use e-tickets.

  • Minize physical contact with handrails, doors and buttons.

  • Avoid contact with other passengers.

  • Clean your hands after using public transportation.

For AmCham COVID 19 updates and insight from members, please click here.

For COVID-19 facts, healthy and safety advice, please click here.

For home office and well-being tips, please click here.