Author: Dr. Zsolt Füsthy Contact: E-Mail OR

Füsthy & Mányai Law Office, Budapest, Lajos u. 74-76, H-1036 Hungary, website:

Overview of legal measures as of May 2,2020 as response to the coronavirus. The information contained herein is effective from May 4, 2020 on. Please note: Due to the extraordinary situation, the legislation is in continuous evolution and may change very fast.


1.1 Legal basis

Legal background

The Hungarian Parliament adopted Act XII of 2020 on the containment of coronavirus in order to enable the Government to take all extraordinary measures necessary for the prevention of the COVID-19 infection, and for the elimination of its consequences. This act stipulates that during the period of the state of emergency (also called state of danger), the Government may, in order to guarantee that life, health, person, property and rights of the citizens are protected, and to guarantee the stability of the national economy, by means of a decree, suspend the application of certain Acts, derogate from the provisions of Acts and take other extraordinary measures. The Hungarian Government may exercise its power for the purpose of preventing, controlling and eliminating the human epidemic, and preventing and averting its harmful effects, to the extent necessary and proportionate to the objective pursued.

The Hungarian Parliament authorised the Government to extend the applicability of the government decrees adopted in the state of emergency until the end of the period of state of emergency. The Hungarian Parliament may withdraw the authorisation of the government to prolong the effect of the government decrees before the end of the period of state of emergency. Otherwise, the repeal of the Authorization Act shall be decided by the Hungarian Parliament upon the end of the period of state of emergency.

Such authorization of the Government is substantially based on Articles 53 and 54 of the Constitution laying down the provisions on the situation of state of danger and special legal order.

In a state of danger, the Hungarian Government is entitled to take a number of measures, within the limits imposed by Act No. 138 of 2011 on Disaster Management (the “Disaster Management Act”). In a state of danger, the Government may, among other measures, require the Minister dedicated for disaster prevention to impose an obligation on economic operators to enter into a contract in order to secure production, supplies and service. In this case, the scope of the products and services subject to the aforementioned obligation to enter into contract may be determined by the respective Government Decree. If there is an imminent danger that the state of danger may becoming more severe, the operation of economic organizations, based on a decree, may become subject to the supervision of the Hungarian State. In this case, the Minister or Government Commissioner acting on behalf of the Hungarian State, in accordance with the provisions of the Disaster Management Act may:

  • review the financial position of the business organization;

  • approve and countersign the financial commitments of the given business organization;

  • and in relation to the immediate elimination of the danger situation and the mitigation of its consequences, decide on matters within the competence of the supreme decision-making body of the given business organization.

In addition to the above, the following may be ordered in a state of danger situation:

  • restricting entry to, or to stay in, a specific area of Hungary and imposing an obligation that such entry or stay is only possible upon special permission;

  • entering, transiting or leaving the specified area of Hungary is only possible if permitted;

  • exiting from a specific part of Hungary may be authorized only after the danger situation no longer exists; and

  • in a state of danger, among others, the use or the restriction of repair capacities as well as stations, ports, airports, warehouses can be ordered in order to secure rail, road, water and air traffic.

In addition to the above, based on the Disaster Management Act, other economic and material service obligations may be prescribed under the civil protection framework, such as the mandatory provision of services to natural and non-natural persons, including the provision of movable and immovable property to the Hungarian state, for the purposes of civil protection tasks. Thus, in the event of a state of danger, even ownership rights may be restricted within the limits regulated by applicable laws.

1.2 Border

  1. Inbound

Passenger entry ban from abroad was introduced, except for Hungarian citizens. Non-Hungarian citizens arriving from abroad cannot enter the territory of Hungary in passenger traffic, with certain exceptions. Citizens of the European Economic Area and Switzerland having permanent residence permit in Hungary enjoy same treatment with Hungarian citizens.

Hungarian citizens arriving from abroad must undergo a medical examination when entering Hungary. Those Hungarian citizens arriving from abroad who, as a result of the medical examination, are suspected of being infected with COVID-19 shall be placed in designated quarantine. Those Hungarian citizens arriving from abroad who are, as a result of a medical examination, not suspected of being infected with COVID-19 are required to undergo a home surveillance for 14 days at their place of residence or stay and these persons are registered by the epidemiological authority and the compliance with the rules on official house quarantine is monitored by the police.

These measures do not apply if the Hungarian citizen arriving from abroad has credibly proved that he / she has either recovered from COVID-19 infection and shows no symptoms of infection, or was subjected to epidemiological surveillance for at least 14 days prior to entry.

The above provisions do not apply to freight transport traffic.

  1. Outbound

Health care workers, soldiers, police officers and government officials may leave Hungary only with the special permission of the Minister. School trips abroad are forbidden. The already booked school trips abroad must be cancelled.

1.3 Visas

No extraordinary measures have been adopted, except for the suspension of issuing visas for the citizens of Iran.

1.4 Export control

Ban of certain products

During the period of state of emergency, the export from Hungary, within the framework of wholesale activities in relation to medicinal products or any other distribution activities on commercial scale of hydroxychloroquine sulphate and of medicinal products and pharmaceutical intermediates that contain the active substance hydroxychloroquine sulphate is prohibited with few exceptions.

1.5 Prohibition of crowds

No public events can be held, except for religious events, civil marriage and funerals. Sport events can only be held behind closed doors.

1.6 Lockdown

Restrictions of free movement

Limitation of movement outside the house is now in effect for an indefinite period for the territory of capital city, Budapest and Pest County (the county surrounding Budapest). According to the relevant government decree, the place of residence or stay may only be left for reasons provided in the decree, e.g.: to perform work or professional obligation; to access to health care services; to supervise and escort children; to provide assistance to persons who are unable to care for themselves or need assistance (such as minors, the elderly and the sick); to pursue individual leisure sports activities or leisure walking; to have marriage and funeral in a narrow family circle; to shop at grocery stores selling daily consumer goods, in drugstores and markets; to perform religious activity; to access certain beauty services, administration requiring personal appearance, including administrative, banking, financial, insurance and postal services, if absolutely necessary; to take care of animals, walking of pets in public areas; to visit a gas station etc.

Furthermore, everyone is required to reduce social contact with other people to a minimum and to keep themselves at least 1.5 meters away from the other person, except those in the common household. It is forbidden to stay in a catering facility except for those employed there. The exception is the delivery of takeaway food.

Persons over 65 may visit a grocery store, drugstore, market, or pharmacy only between 9 a.m. and noon. During this period only, persons over 65 may stay at the aforementioned premises, except for those employed there.

Violating these specific restrictive measures are now considered a minor offense.

The above limitations were (and are) valid for the territory of whole Hungary, but they are to be released as of May 4, 2020. Restrictions for persons over 65 and keeping the 1.5 meters distance reman in force. Those catering facilities can be opened that have open-air places (gardens, terraces etc.)

1.7 Open Businesses, Industries and allowed Gatherings


Restrictions from May 4, 2020 on are divided into parts. The below strict restrictions remain in force in the territory of Budapest and Pest County while retail businesses in other localities can be re-opened

Physical presence in kindergartens, schools and universities is prohibited. A number of public offices is closed.

Only the following types of shops may be open between 15:00-06:00: groceries, pharmacies, shops that sell hygiene products, tobacco shops and gas stations. All other shops must close after 15:00.

Only the employees may stay in restaurants, bars, cafés between 15:00-06:00 (except for take-away services).

Only the employees may stay in cinemas, theatres and libraries. Visiting these facilities as consumer is prohibited

1.8 Shareholder's meetings and other meetings of companies

Preference of electronic tools

The Government simplified certain rules regarding the meeting and decision-making of the supreme body of legal persons, e.g. holding meetings by means of an electronic means of communication, use of electronic signatures etc.

On 21 April 2020, the Hungarian government adopted Decree no. 140 of 2020 on the introduction of the “economy saving package”, which extends the deadline for Hungarian companies to prepare, approve, deposit and publish their annual reports.

This extension is until 30 September 2020 if the deadline would otherwise expire between 21 April and 30 September 2020.

According to Hungarian general accounting rules, companies are obliged to prepare, deposit and publish their annual accounts on the website of the Company Information Service by the end of the fifth month following the balance sheet date of these accounts. For example, if the financial year corresponds to the calendar year (i.e. the balance sheet date of the annual accounts is 31 December), the deadline provided for the preparation, depositing and publication of the annual accounts is 31 May of the following year.

Since the current internal crisis may make it difficult for numerous companies to meet the above deadline, the Hungarian government decided to prolong this deadline until 30 September 2020, if the deadline would otherwise expire between 21 April and 30 September 2020.

Under Hungarian law, prior to depositing and publishing annual accounts, each company must hold a general meeting to pass a resolution on the adoption of the accounts and the appropriation of after-tax profits. As mentioned in our previous article on the amendments of holding general meetings, to facilitate the approval process, the Hungarian Government had already introduced some specific rules pursuant to which Hungarian companies are now able to hold their general meetings electronically or pass resolutions in writing even if these procedures are not permitted by their constitutional document.

In addition, if the general meeting cannot be held electronically or written resolutions cannot be passed and the decision is urgent, necessary for the maintenance of the lawful operation of the company and for the management of the current crisis situation, the management is entitled to pass a resolution on the adoption of the annual report and the appropriation of the after-tax profit instead of the general meeting. If the management exercises such exceptional power, the decision must be supported by a majority of the shareholders as set out in the respective Hungarian government decree.

1.9 Supply of essential medical goods

Regulation of public procurement in relation to equipment necessary to prevent and cure coronavirus have been simplified.

1.10 Health care

Easier access to medicines

The government facilitated the conditions of pre-license use of certain medicines.

Care home institutions shall be treated in the same way as hospitals in connection with the delivery of health oxygen to the patient.

In order to decrease the danger of infection payment service providers do not apply strong customer authentication if the individual amount of the electronic payment transaction does not exceed HUF 15,000 (approx. EUR 42). This means that the threshold of the contactless payment is increased to HUF 15,000,-.

So called “Hospital Commanders” were assigned to several hospitals with the aim of ensuring the compliance with rules concerning the epidemic risk and the protection of the health care equipment. They are responsible solely for the economical operations of the hospitlas and the professional medical management remains with the directors of the hospitals who are physicians.

1.11 Persons with a higher risk

Higher risk

Persons over the age of 65 and suffering in chronic illnesses belong to this category.

1.12 Sanctions

Warning rather than punishment

The Police Department is responsible for controlling if people obey the provisions on restricting free movement. However, mostly verbal warnings are applied instead of imposing fines. In additon, potential punishment for committing criminal offenses such as scare-mongering or threat to public (spreading fake news) was increased and some proceedings have already been introduced.]


2.1 Legal basis

Capital market situation

On 16 March 2020, and on 18 March in respect of consumer loans, the National Bank of Hungary (NBH) has announced that it is taking immediate action to help the business sector. The NBH requested that the banks provide a precautionary repayment moratorium regarding all loans due to the extraordinary situation, in order to improve companies’ liquidity. The NBH, at its discretion, announced a repayment moratorium in respect of loans provided under the Funding for Growth Scheme ("FGS") and approved the restructuring of loans and rescheduling of repayments. As a result of the FGS, small and medium-sized enterprises participating in such scheme will be exempted from their repayment obligations under the FGS loans until the end of 2020. Consequently, banks do not have to comply with their repayment obligations under their refinancing loans to the NBH. The NBH will publish detailed regulations in the coming days.

The Government introduced the following measures on 18 March 2020, in its Governmental Decree No. 47/2020. (III. 18.) ("Decree 47/2020") on immediate measures of the mitigation of the national economic effects of the coronavirus pandemic in connection with the above-mentioned announcement of the NBH.

Unless the parties agree otherwise, during the period of the state of danger, the principal, interest and fee payment obligations of a borrower under any credit, loan and financial leasing agreement ("Loan Agreement") provided by a lender in a business-like manner shall be modified so that the debtor will receive a payment extension regarding its principal, interest and fee payment obligations under its agreement ("Payment Moratorium"). The Payment Moratorium will not affect the right of the debtor to comply with its payment obligations in accordance with the original terms of the Loan Agreements. Consequently, the Loan Agreements will be modified automatically with regard to the Payment Moratorium and the maturity of the Loan Agreements will be extended unless the parties agree otherwise, or mutually confirm that the relevant terms and conditions of the Loan Agreements shall remain in full force and effect.

The modification of repayment dates under the Loan Agreements will also amend the ancillary and non-ancillary supplementary obligations; thus, the security period under the security agreements will automatically be extended, regardless of whether the parties incorporated the supplementary obligation in an agreement or in a unilateral declaration. The period of the Payment Moratorium will expire on 31 December 2020, which period may be further extended by the Government. The payment dates set out in the Loan Agreements, and the duration of the undertaking, will be extended by the period of the Payment Moratorium. It should be noted that this does not mean the wavier of the repayment principal and interest, but only a suspension until the end of 2020, which indicates the rescheduling of the repayments and the extension of the duration. Those Loan Agreements that would have terminated during the period of the state of danger will be extended, for now, until 31 December 2020.

The above provisions apply to any Loan Agreements entered into and to any loan utilised up to midnight, 18 March 2020; thus, the Payment Moratorium does not apply to loans which have not been utilised. If a borrower has unutilised facilities, from which it would intend to draw down but in respect of which it has also already made earlier utilisations, the repayments of the loans utilised before and after 18 March 2020 would differ.

2.2 Support measures

Government and tax supports

With the exception of some sectors (e.g. heavy industry), companies may be eligible to competitiveness-enhancing aid in the form of a non-repayable budget grant the amount of which is maximum EUR 800,000 but it is also adjusted to the amount of investments. The aid is provided through a tender.

The deadline of tax assessment, declaration and payment obligations relating to (i) corporate tax, (ii) taxes of small businesses, (iii) income tax of energy suppliers, (iv) local business tax, and (v) innovation contribution which would be due between April 22, 2020 and September 30, 2020, is extended until 30 September 2020. The deadline for preparing, publishing, depositing and publishing, as well as for submitting the annual report is extended until 30 September 2020.

Tax administration rules: Based on the classification performed during and after the emergency, the taxpayer's qualification as a reliable taxpayer cannot be revoked due to the breach of the tax liability due during the emergency or within thirty days thereafter.

New funds

The National Bank of Hungary (NBH) announced that the Funding for Growth Scheme Go! will be launched on 20 April 2020, and the current allocation amount will be raised by HUF 1,000 billion to ensure affordable financing for domestic small- and medium-sized enterprises. The new Scheme is identical to the earlier phases of the FGS in terms of its key parameters and the method of implementation. The NBH will continue to provide refinancing loans to credit institutions at a zero-interest rate,

Investment loans

Investment loans (including leasing) will still be available; with a maximum maturity of 20 years; furthermore, there will be working capital loans, with a wide range of purposes and a maximum maturity of 3 years. The maximum amount of facility available for an SME will be HUF 20 billion. Banks will have to have their credit approvals within two weeks, in order to ensure that companies will be financed as soon as possible.

The total amount available under the corporate bond purchase programme, the Bond Funding for Growth Scheme (“BFGS”), will remain unchanged at HUF 450 billion, however NBH may modify the conditions of BFGS to increase liquidity in the corporate bond market. The Bank’s maximum amount of exposure to a given group of corporations has been raised from HUF 20 billion to HUF 50 billion. The maturity of securities eligible for purchase under the BFGS has been modified from 10 years to 20 years.

MFB Loan Programs

Two government resolutions were recently published in the Hungarian Gazette in which the Hungarian Government initiated separate loan programs with the involvement of the Hungarian Development Bank (“MFB”), the MFB Crisis Loan Program, the MFB Competitiveness Program, and the guarantee program (MFB Vis Major Guarantee) for SMEs and large enterprises.

MFB Crisis Loan Program:

▪ SMEs may apply for loans for working capital, investment, operating and refinancing purposes.

▪ The State guarantees 80% of the principal amount of the facility.

▪ Finance terms of up to ten years for investment loans and up to three years for working capital loans and refinancing loans.

▪ The maximum amount of a loan facility for an SME is HUF 150 million (approx. EUR 428,570).

Total available amount under this program is HUF 180 billion (approx. EUR 514 million).

MFB Competitiveness Program:

▪ SMEs and large enterprises may apply for loans for working capital, investment, acquisition, operating and refinancing purposes.

▪ The State guarantees 80% of the principal amount of the facility.

▪ Finance terms of up to fifteen years for investment, acquisition, operating and refinancing loans and up to three years for working capital loans.

The minimum amount of a loan facility available for SMEs and large enterprises is HUF 1 billion (approx. EUR 2.85 million) the maximum amount is HUF 10 billion (approx. EUR 28.5 million). Total available amount under this program is HUF 150 billion (approx. EUR 428 million).

MFB Vis Maior Guarantee:

▪ SMEs and large enterprises may apply for guarantees for working capital loans and investment loans;

▪ The State guarantees 90% of the principal amount of the facility.

▪ Maximum tenor of the guarantee is six years

▪ Maximum amount of the guaranteed facility is HUF 10 billion (approx. EUR 28.5 million);

▪ Total available amount – HUF 50 billion (approx. EUR 128 million).

Various other measures

The payment obligation on health insurance contributions in certain sectors is reduced.

No contribution shall be paid to tourism development March, April, May and June for certain economic operators.

Tourist tax suspension and related budgetary provisions: Tourist tax after a guest night spent between 26 April 2020 and 31 December 2020 does not have to be paid by the taxable persons liable to collect the tax, neither have to collect or pay, but they must declare the established but not collected tax to the tax authority.

The Government supports the employment of those working on the field of research and development in the framework of the Economic Protection Action Plan. The monthly amount of the aid given by the Hungarian state may not exceed HUF 318,920 (approx. EUR 900) per employee. The duration of the aid is maximum three months.


3.1 Legal basis

Healthy and safe workplaces

The employment relationship between the employer and the employee is basically regulated by the Labor Code. The most important principles are the following:


Employers must maintain a healthy and safe workplace. This includes:

  • taking preliminary protective measures in the workplace;

  • taking preventive measures to safeguard employees' health and stop the spread of COVID-19;

  • informing employees about the protective measures in place; and

  • gathering information from employees in order to make the appropriate decisions.

Preliminary protective measures

In order to take preliminary protective measures in the workplace, employers should:

  • conduct risk assessments of the workplace (if necessary, this should be completed with the help of an occupational physician, an employment safety expert or an employee representative);

  • create a plan of action (at management level) in case other precautionary measures have to be ordered or an employee carrying the virus enters the workplace; and

  • procure the necessary protective equipment and prepare themselves and employees to use it.

Preventive measures

In response to COVID-19, employers should take the following preventive measures:

  • postpone business trips and corporate events;

  • conduct risk assessments relating to destination countries in case of secondment and maintain and update a list of endangered territories;

  • list the positions and tasks which may be carried out from home or via remote work;

  • create an action plan regarding tasks that cannot be carried out from home (eg, creating orders of duty and work plans); and

  • set up a crisis staff group (a quasi 'operative action group') which may make decisions and introduce measures with immediate effect. Besides the company's management, it is worth involving or communicating with an occupational physician, a communication expert and an legal expert in this regard.

Informing employees

For the purpose of organising a healthy and safe workplace, employers should inform employees about:

  • the possible symptoms of COVID-19, the incubation period and the ways in which it spreads;

  • precautionary measures that they can take to avoid infection (eg, regular hand washing and the use of antiseptics);

  • the availability and use of protective equipment and chemicals provided by the employer; and

  • the steps that they must take if they have or develop symptoms (eg, reporting it to their employer, direct supervisor and occupational physician).

Privacy aspects of information requests

The National Authority for Data Protection and Freedom of Information has addressed the implications of COVID-19 on employers' handling of personal data.

Employers may process employees' personal data as follows:

  • Employers cannot use diagnostic devices (eg. a thermometer) in order to screen for COVID-19.

  • Employers may order that employees notify the person designated by the employer or the occupational physician or other doctors if it is assumed that they have been exposed to COVID-19 (eg, they have met with someone who may have had COVID-19).

  • In connection with an employee's notification regarding their assumed exposure to COVID-19, employers may record:

    • the employee's identification data;

    • the content of the employee's notification (even if the employee stayed in an affected area for a private purpose); and

    • the measures that the employer has ordered.

  • Instead of obtaining an employee's notification, employers may distribute a questionnaire if they have carried out a preliminary risk assessment and concluded that the questionnaire does not unnecessarily restrict employees' right to privacy. The questionnaire cannot contain any question concerning employees' medical history and the employer cannot require employees to enclose health documentation.

Employees' obligations

If an employee is asymptomatic, they must be present at their workplace. The fear of infection does not serve as a legal basis for them to refuse their duty to perform work and the availability obligation.

Employees also have a duty to cooperate and provide information to their employer regarding circumstances which may be relevant for their health and safety and work performance.

Employers' payment obligations

If an employee is healthy (asymptomatic) but must be exempt from work for safety reasons according to company procedure, they may be entitled to their base salary (stoppage time).

If the competent authority orders home quarantine in respect of an employee and they perform work from home, they are entitled to their salary. If there is a lack of work, they may be entitled to a sickness benefit.

If an employer orders an employee to work from home and the employee performs work from home, the employee is entitled to their salary. If an employee cannot work from home (eg, if they have a factory job), they are entitled to their base salary (stoppage time).

If an employee is unable to work due to the closure of schools or childcare facilities, but the employee performs work from home, they are entitled to their salary. If an employee is unable to work from home, they may agree with their employer to take their annual leave or unpaid leave. Otherwise, such absence is regarded as an absence due to personal or family reasons, which deserves special consideration, or unavoidable external reasons and no compensation is payable by the employer.

If a workplace is closed or tasks are stopped due to a reduction of capacity, the situation must be examined to determine whether employees are entitled to compensation (base salary for the stoppage time) or – if the stoppage or closure is due to unavoidable external circumstances (ie, force majeure) – whether employees are not entitled to compensation.

3.2 Support measures

Home office and remote working

Under the new rules, employers may order home office or remote work without employees' consent.

Employers bear the duty and liability to ensure that the technical conditions for the purpose of work are satisfactory and that the working conditions are healthy and safe. In practice, the latter may cause problems as, in principle, employers must inspect the place of work and this may be impossible under the circumstances.

Work schedule

Employers are still responsible for determining employees' work schedule and working hours, but individual agreements may be concluded (eg, a partial or flexible work schedule). In this sense employers may modify the already communicated work schedule without taking into consideration any deadline for such modification.

Employers' measures

The employer may take the necessary and justified measures to check the health condition of the employees.

The provisions of collective agreements derogating from the above will not by applicable during the period of the application of the respective government decree. The employer and the employee have been entitled to derogate from the provisions of the Labour from the provisions of the Labour Code by way of a separate agreement.

Extended working time cycle

A new rule was introduced whereby during the state of emergency, employers may order a working time cycle (also called refernce period) of 24 months (normally this is for four or six months). Employers may extend the ordered working time cycle up to 24 months. As a work time cycle allows employers to allocate working time unevenly within the term of the cycle, this measure provides greater flexibility (ie, employers may order less work when the business is struck by the crisis and order more work when business resumes).

Collective bargaining agreements cannot diverge from the abovementioned provisions.

If the state of emergency ends, it does not affect the allocated work time cycle ordered during the state of emergency.

The application of the 24-month reference period may help to manage the period of decreased customer orders or partial or full shutdown by allowing employers to schedule reduced working days or rest days for this period, and later the employer can schedule more or longer working days as allowed under the applicable laws. Therefore, once production is up again, instead of overtime, employers can schedule regular working time for the balance of the reference period.

"Kurzarbeit" (reduced working time)

A reduced working time subsidy was introduced with relatively strict conditions as to the amount of reduction and other criteria. The wage subsidy may be applied for and used if an employee's working time is reduced to between 50% and 70% of their original working time, but it must be for a minimum of four hours a day. The wage subsidy is subject to several further requirements, such as the agreement of an 'individual development timeframe' (ie, a period in which the employee must be at the employer's disposal and attend training or perform tasks relating to their individual development). The timeframe for such individual development must cover 30% of the work time reduction and the employer must pay the salary for that period.

Quirte recently the conditions of reduced working time and the related wage subsidy were amended. If an employee and employer agree on the reduced working time due to the pandemic, the employer may request a subsidy for the employee for a three-month period from the respective government agency. The reduced working time means that part-time employment on a daily basis can reach up to 25% but cannot exceed 85% of the working time determined in the original employment contract (based on a three-month average). If the reduced working time exceeds 50% of the original working time, the parties must agree on a so-called 'individual development timeframe' for the duration of the subsidy. In that case, the employer must pay the employee's base salary for the individual development timeframe period.

The subsidy is based on an employee's monthly base salary, on the day of the application submission, reduced by the amount of the advance of the personal income tax and contributions. The subsidy is 70% of an employee's base salary for the period of time lost from work due to the reduced working time. The subsidy is free from any duties and levies. The subsidy is not paid during unpaid holiday. Employers using this subsidy must undertake to employ the workers who received the subsidy for the duration of the subsidy period and one month thereafter and they cannot order overtime work for the employees concerned.

Special healthcare services

A new rule was introduced whereby during the state of emergency, employees who are on an unpaid leave due to COVID-19 are entitled to healthcare services. As of 1 May 2020, employers must establish, declare and pay healthcare service contributions in respect of the concerned employees. Employers may request a moratorium until the 60th day after the end of the state of emergency.

Subsidy for Research and Development

An R&D wage subsidy was introduced. Employers employing researchers and developers may apply for a direct wage subsidy for a maximum of three months to help pay the wages of employees employed as 'researchers and developers' based on the definition provided by the Act on Research, Development and Innovation. This wage subsidy is paid to the employer by the relevant governmental office and aims to support employers in paying these employees' salaries. The R&D subsidy amount cannot exceed HUF318,920 (approximately €1,000) on a monthly basis per employee. Employers using this subsidy must undertake to employ the R&D employees who received the subsidy for a period equivalent to the period of the subsidy.


4.1 Legal basis

Government Decrees

A great number of Government Decrees have passed to support to survival businesses especially of those sectors that are mostly suffer from the crisis.

4.2 Support measures

Extended tax breaks

To provide general relief for all companies, tax enforcement procedures in progress as of 24 March 2020 are suspended until 16 days after the state of emergency has ended. The legislation, however, does not seem to contain any relief from tax enforcement procedures that would start after March 24.

The list of industries considered to be hardest hit by the outbreak has been extended, fine-tuned and is now defined according to the NACE 2 classification system of activities recognised across the EU. The amended list of “endangered activities” now includes:

  • Taxi operation

  • Accommodation Food and beverage service activities

  • Creative, arts and entertainment activities

  • Sports activities and amusement and recreation activities

  • Gambling and betting activities

  • Motion picture, video and television programme production, sound recording and music publishing activities

  • Organisation of conventions and trade shows

  • Publishing of newspapers

  • Publishing of journals and periodicals

  • Programming and broadcasting activities

  • Travel agency, tour operator and other reservation service and related activities;

  • Physical well-being activities

  • Inland passenger water transport

  • Plant propagation

  • Growing of other non-perennial crops

  • Growing of other perennial crops

  • Wholesale of flowers and plants

  • Retail sale of flowers, plants, seeds, fertilisers, pet animals and pet food in specialised store

  • Hunting, trapping and related service activities

  • Distilling, rectifying and blending of spirits

  • Manufacture of wine from grape

  • Manufacture of beer

  • Growing of grapes.

For the purposes of the above provisions "main activity" means the activity from which the taxpayer generated most of its revenue, but

at least 30% during the 6 months preceding the entry into force of the respective government decree.

For the period between March and June 2020 inclusively, employers and entrepreneurs under the general tax scheme operating primarily in these endangered sectors (i.e. the majority, and at least 30% of sales revenues realised from these sectors) are entitled to the following benefits:

  • exemption from paying social security taxes for employees and for the personal activities of entrepreneurs. Training contributions are also exempted and the annual rehabilitation contribution liability is proportionally decreased to exclude these months.

  • social security contributions payable by employees and entrepreneurs are reduced to 4% healthcare contribution payable for healthcare services and cannot exceed HUF 7,710 a month.

KIVA taxpayers in the endangered sectors are also released from their obligation to pay KIVA on payroll payments made to individuals contributing to their activity.

A separate endangered activities list has been enacted for small taxpayers under the KATA flat rate scheme. This list is similar to the above, but also includes healthcare services, various construction and repair services and beauty parlours. KATA taxpayers operating in these areas are relived from their fixed-rate payment obligations. Any outstanding tax liability by KATA taxpayers may be settled in ten equal instalments after the state of emergency has ended.

The exemption from the 4% tourism contribution has been reiterated with further guidance on the procedural rules to be followed.

These measures were introduced through Government Decrees No. 57-61/2020. (III. 23.).

Various other benefits

The payment obligation on health insurance contributions in certain sectors is reduced.

No contribution shall be paid to tourism development March, April, May and June for certain economic operators.

Tourist tax suspension and related budgetary provisions: Tourist tax after a guest night spent between 26 April 2020 and 31 December 2020 does not have to be paid by the taxable persons liable to collect the tax, neither have to collect or pay, but they must declare the established but not collected tax to the tax authority.

The Government supports the employment of those working on the field of research and development in the framework of the Economic Protection Action Plan. The monthly amount of the aid given by the Hungarian state may not exceed HUF 318,920 (approx. EUR 900) per employee. The duration of the aid is maximum three months.


5.1 Legal basis

Legal background

Under the Authoritation Act the Government has adopted several decrees setting forth provisions also on tenancy, rental and lease agreements.

5.2 Measures

Freezing rental fees

Non-residential lease agreements cannot be terminated by unilateral termination until 30 June 2020 in sectors that are most affected by the coronavirus outbreak (specifically tourism, hospitality, entertainment, gambling, film, performing arts, event organizer and sport service provider industries).

Furthermore, the rent amounts of these lease agreements cannot be raised during the emergency situation declared by the Hungarian Government, even where the underlying lease agreement would provide the possibility to raise the amount of the rent.


6.1 Legal basis

Legal background

Under the Authorization Act the government has issued lots of decrees creating special rules of various legal proceedings.

6.2 Measures

  1. Civil law proceedings

The Hungarian Government has settled the rules governing the various legal proceedings in the state of emergency, concerning among others, the rules relating to deadlines, conducting procedural acts, interim measures, the way of submissions and court hearings. As a general rule, if a procedural deadline expires in civil proceedings (including extrajudicial ones), administrative proceedings (including extrajudicial ones), in the period between the entry in force of the extraordinary adjournment (i.e. 15 March 2020) and 15 April 2020, then such deadline will be extended to 30 days after April 30,2020. The Government Decree also applies to proceedings ongoing at the date of its entry into force.

The court of registration may take only documentary evidence. The Company Information and Electronic Company Registration Service may provide any company information or other service exclusively by electronic means

2. Notarial proceedings

Non-contentious notarial proceedings: With the exception of, among others, registration into the security interest register (its modification, deletion) and making a statement of identity related to such registration, the notary may postpone a procedural act requiring attendance in person to be performed by a date falling within the period of state of emergency and shall notify the persons concerned of this fact; if such a procedural act that was not postponed is missed, the legal consequences of omissions shall not apply. Furthermore, with the exception of a notarial deed containing a testamentary disposition, during the period of state of emergency, the notary may read out loud a notarial deed and perform his notification obligation by means of telecommunication suitable for maintaining continuous audio and video connection. A request to draw up a notarial deed submitted as a paper-based document or orally may also be submitted after the notarial deed is read out loud or at the time of its signing. However, the relevant parties must, possibly on the same day, sign the read-out-loud notarial deed in person in front of the notary public.


7.1 Legal basis

Government Decrees

Under the authorization of Act XII of 2020 the Government has passed some decrees facilitating the positions of the debtors.

7.2 Measures

Suspension of enforcement proceedings

No enforcement orders shall be delivered to the debtors during the state of emergency. Certain enforcement activities are to be put on hold for the period of the special legal order.

Moratorium of evictions and suspension of seizures and auctions in enforcement proceedings.

Tax enforcement procedures pending shall be paused until the 15th day following the end of the state of emergency. Limitation period of the right of enforcement shall also be paused for the same period.


8.1 Legal basis

Government goal

As Prime Minister Viktor Orbán announced the Hungarian Government is committed to create as many jobs as were destroyed by the pandemic. The tools for this noble goal are being elabaorated and published regularly. Most of them is contained in this overview.


Under the authorization of the Hungarian Constitution the Government is authorized to adopt measures in the period of state of emergency. The latest measures resulting in releases in the life of the population and re-opening of businesses were announced on April 30, 2020 by Prime Minister Viktor Orbán.

8.2 Measures

Moratorium of repayment of loans

Qualifying as unique measures in the world, any and all repayment obligations of any and all loans, including leasing fees, personal and business loans, credit cards etc. are suspended until December 31, 2020.

This moratorium was introduced for all retail and corporate financings. It includes capital, interest and fee payment obligations. Irrespective of the moratorium, debtors may of course continue performing their contractual obligations if they would like to.

Under the moratorium, the due date for fulfilling contractual obligations under financing agreements will be extended in line with the term of the moratorium. Due to the extension, security interest is also impacted (irrespective of whether ancillary or not and are incorporated into an agreement or a unilateral declaration). Contracts expiring during the national emergency will also be prolonged until 31 December 2020.

The annual percentage rate of consumer credit agreements not secured by mortgages/pledges concluded from 19 March onwards will be limited. The annual percentage rate of such credits will be the maximum base rate + 5% of the central bank.

Right for opting out

During the moratorium, capital and interest payment obligations are suspended. However, unpaid interest will be continuously calculated to the capital, and at the end of the moratorium, debtors must repay their debts including this compound interest. This may lead to a significantly higher debt. Of course, debtors may opt-out from the moratorium thus they can avoid such increase of their debts.

Data Protection Changes

In Decree No. 179/2020 issued on 4 May, the Hungarian government has restricted the protection and rights of data subjects concerning anti-pandemic measures as stipulated by the EU's General Data Protection Regulation (GDPR) and the Hungarian Act on Freedom of information and data protection (Info Act). Furthermore, the decree restricts the right for claiming public information granted by the Hungarian Info Act related to COVID-19 measures.

The government decree stipulates that data controllers’ measures under articles 15 to 22 of the GDPR as pertaining to personal data processed for the purpose of preventing, recognising and investigating the COVID-19 disease and stopping its spread are suspended until the termination of the state of emergency. The 30-day GDPR deadline for answering COVID-19 - related data subject requests will start only on the first day after the termination of the state of emergency. This means that if a data subject submits a request for access to, erasure, rectification, and restriction of the processing of his personal data related to COVID-19, or lodges an objection against the processing of his personal data related to COVID-19, the data controller (i.e. hospitals, government bodies, emergency management offices) is not required to take any steps to erase, rectify the data or restrict the processing until the end of the COVID-19 state of emergency that is now in place for an indefinite period of time.

Furthermore, the new legislation does not define the exact categories of personal data and the type of data controllers that fall under the new law. As a result, any data controller taking part in the fight against COVID-19 or processing COVID-19 - related personal data can interpret the new legal provisions widely and broaden its restrictions as it applies to personal data as much as possible.

In addition, the decree contains other clauses restricting the rights of data subjects: data controllers falling under the new law now do not need to provide data subjects with personalised information as listed in articles 13 and 14 of the GDPR, such as the type of data processed, the purpose and legal basis of the data processing, and name of the data controller, notification of data transfers to third parties and to third countries, the guaranties of these data transfers, their retention periods, and all information about data protection rights and remedies for data subjects.

Instead, the data controller is required only to issue a privacy notice that contains the purpose and legal basis of the data processing and to publish this notice electronically so that it is available to the data subject. Consequently, a data subject's access rights are restricted since he cannot request personalised information on the processing of his personal data related to the COVID-19 situation during the state of emergency.

Furthermore, the decree restricts the rights of data subjects to lodge complaints with the data protection authority (DPA) and the right to an effective judicial remedy against the DPA and the data controller or processor by stipulating that the court and DPA are only entitled to start proceedings on the first day after the termination of the COVID-19 state of emergency even for complaints submitted now. It must be emphasised that it is currently not known how long the government will maintain the state of emergency.

Until the termination of the COVID-19 state of emergency, requests for public information based on the Info Act must take into account the following differences:

  • Request for public information cannot be submitted personally or orally to any organisation with public-service functions.

  • The organisation with a public-service function must comply with an eligible request for public information within 45 days instead of 15 days, a deadline that can be prolonged for one time only by 45 days.

All provisions of the new government decree apply not only for future requests and procedures, but for requests and procedures that are currently on-going.

Competition and Antitrust Law Considerations

To date, only one provision has been adopted under the special legal order to allow exemptions from competition law, but it affects only the merger control notification obligation under special circumstances. As an exception from the general notification requirement to the HCA, there is no notification requirement for a majority state owned venture capital fund or private equity fund acquiring sole or joint control rights for investment protection purposes in relation to financing necessitated by COVID-19.

Undertakings must still continue to pay attention to competition compliance. This article aims to help companies meet these requirements in view of the European Competition Network's (ECN's) recommendations. The Hungarian Competition Authority (HCA) is an ECN member and therefore follows the network's recommendations.

During the COVID-19 crisis, companies may feel a stronger urge to coordinate their market strategy, align their prices or the quantity of products to be put on market, either in order to survive or simply take advantage of the increased demand and achieve higher profits. Such conduct remains prohibited and should be avoided. At the same time, cooperation between companies can be driven by mere goodwill: for example, companies contact each other to ensure that products in short supply are properly replenished and distributed fairly. Such consultations and agreements in the interests of consumers may be exempted from antitrust prohibitions in the present circumstances if they are limited in time and limited to what is strictly necessary to ensure the continuity of supply.

Companies are responsible for assessing the legality of their intended agreements with competitors. However, if these cooperation projects have EU relevance and fall under EU competition law, companies may seek guidance of the European Commission in the following ways.

In connection with the COVID-19 pandemic, demand for certain products has increased dramatically, leading to explosive price increases. For example, face mask prices in Hungary have seen a 16-fold increase compared with pre-pandemic conditions. Competition law prohibits the setting of unfair selling prices only for companies in a dominant market position, provided that the price increase is not the result of a cartel as discussed above. At the same time, the Act on Trade establishes a presumption in respect of dominant market position: if a company's (consolidated) net sales from the retail sale of daily consumer goods exceeded HUF100 billion in the previous year, the company is presumed to be in dominant market position on this market. Due to this provision, most mall chains are in a dominant market position in Hungary, so they must pay close attention to their pricing practices.

In the coming period, competition authorities across Europe, including Hungary will need to carefully check the pricing of products of strategic importance during the COVID-19 pandemic (eg, face masks and hand sanitisers). If such authorities find that an unjustified increase in price has been the result of an agreement between undertakings (ie, a cartel) or an abuse of a dominant market position, they will not hesitate to take action. To prevent the overpricing of potentially non-dominant retailers, manufacturers can set maximum selling prices. This is not only a lawful measure in the present situation, but strongly recommended.

Businesses must also meet a number of requirements when advertising their products. There is a particularly high demand for products and services that play a role in the prevention and treatment of COVID-19. In addition to face masks and hand sanitisers, this includes medicinal products, vitamins and various disinfectant products and services.

According to the HCA, the authority is paying special attention to the following commercial practices:

  • a medicinal or therapeutic effect is unjustifiably attributed to a product – it is prohibited to attribute a medicinal effect to a product not only by making a direct claim in ads, but also if the ad provides information about the active substances or ingredients in such a way that the ad's message as a whole suggests that the product has a medicinal or therapeutic effect.

  • a medicinal effect is attributed to food (this is prohibited in all cases);

  • a particularly sought-after product is advertised for sale despite insufficient stocks therefor and no replacement stock is expected in the future; and

  • a product is listed at a discounted price but was never sold at the indicated 'original' price.

The HCA has already launched an investigation against a company advertising a product that offers protection against viruses and bacteria. If a company advertises through influencers, the company itself is also responsible for ensuring that influencers comply with the above rules.


Prime Minister Viktor Orbán also reported that the situation is monitored each day, at the end of each week and analysis is made by the experts and new announcements can be expected at the end of each bi-weekly period. The next announcement is scheduled to be published on May 15, 2020.