I. Allowances in the sectors affected by lockup
Companies most affected by government’s restrictions will be exempted from payment of social contribution tax, vocational training contribution payable after employees, or from occupational rehabilitation contribution if applicable. However, in accordance with the prescribed restrictions, the allowances are only applicable in November. Similar to the above explained, in the case of taxpayers taxed under the small business tax scheme (KIVA) staff costs paid for November do not create a tax base.
In order for the company to benefit from the allowances, the following five conditions must be fulfilled:
1. The main activity of the company must correspond to one of the eighteen activities listed in the government decree, and at least 30 % of the company’s income must have been derived from this activity in the last six months before the regulation came into force. The above mentioned 18 activities relate to the companies most affected by the restrictions introduced, i.e. mainly those which operate closed common areas such as: bars, cinemas, theatres, sports complexes, botanical and zoological gardens or amusement parks.
2. For the duration of the benefit, the employer may not reduce the employee’s salary.
3. The employer – during the period of the benefits – may not terminate the employment relationship of the employees with notice.
4. Because of the Emergency Situation, the employee would have been dismissed.
5. The relief of the company must be registered with the tax authorities
The company can cumulate the above tax allowance with other subsidies from e.g. the local government or of the European Union, but there is a limit to this, namely that the amount of subsidies received by the employer cannot exceed the total wage costs of the employee.
It should be noted that beneficiary companies are obliged to retain all documents related to support for 10 years.
II. Wage support
Companies whose main activity corresponds with the conditions for tax allowance described above can also claim wage subsidies up to 50% of the gross salary of the employees concerned. However, it should also be noted that the level of support may not exceed 150% of the mandatory minimum wage. The condition of the support is that the employee’s employment relationship exists on the last day of the supported period (currently: 30 November 2020) and the employer actually pays the wage to the employee for the respective period. The possibility of support – in connection with the announced restrictive measures – will only be applicable to November wages.
The application for the wage support must be submitted by the employer to the competent capital or regional government authorities where the company is situated, which decides on the granting of the support within 8 days.
This form of support can also be combined with other forms of support, but only up to 100% of the employer’s wage costs, and there is also 10-year obligation to keep records relating the wage support.
III. State support for accommodation facilities
From the period 11 November to 11 December, the state will compensate 80% of the value of the bookings for companies in the accommodation sector.
The support has three conditions:
1. The booking must be registered at the “Nemzeti Turisztikai Adatszolgáltató Központ (NTAK)” by 8 November 2020.
2. During the period of support, the employee’s employment relationship must be maintained.
3. The employees’ wages are paid.
The maximum level of support is set the relevant EU regulations and companies must keep the documents relating to the use of support for 10 years.