On August 3, 2020, CEE Legal Matters reported that Sorainen had advised Montonio on its generation of EUR 500,000 from both Estonian and international investors. CEEIHM spoke with Rasmus Oisma, Director at Montonio Finance, to learn more about the matter.

Former Dechert Counsel Daniel Dozsa has joined recently-established Dispute Resolution boutique Queritius in Budapest.

On 20 March 2015 the Hungarian Competition Authority ("HCA") imposed a staggering fine on Auchan for abusing its significant market power. The HUF 1.06bln (approx. EUR 3m) fine is the highest ever imposed by the authority for the infringement of the Trade Act (Act CLXIV of 2005 on Trade). Although the decision is from 2015, the Hungarian courts put an end to the judicial review only now. The Supreme Court of Hungary has upheld the HCA's decision in its entirety.

This article is an excerpt of Producing in CEE, Dentons’ guide to tax and financial incentives for film, television and digital media production.

The Hungarian Government, in order to join the world in data asset management and to set data economy in action in Hungary, has established the National Data Asset Agency, which commenced its activities on 1 October 2020.

On 14 October 2020 the Hungarian Data Protection Authority (NAIH) has released its guidance on body temperature measurement in relation to COVID-19.

In 2014 Hungary introduced the advertisement tax as a direct business tax that must be paid by media content and service providers and publishers of advertisements. The tax base is the net sales revenue originating from the taxable activities in the tax year, i.e. the turnover and not the profit, and a progressive tax rate was established originally with six tax rates between 0% and 40%. After several amendments, since 1 July 2017 the tax rates were 0% up to HUF 100 million and 7.5% for the portion exceeding this amount. From 1 July 2019 the advertisement has been temporarily suspended and the tax rate was decreased to 0%.

The economic situation caused by the coronavirus pandemic has highlighted the need for regulations that protect jobs and can respond effectively to the challenges of the economic environment and the labor market of this unprecedented time. It is essential for labor market actors to maintain and promote jobs that provide legal employment and to create such jobs as widely as possible, therefore, the Hungarian Government issued a bill about employment services, subsidies and employment supervision to the Parliament for legislation.

The Budapest office of Schoenherr has advised Doosan on its EUR 210 million investment in its copper foil production base in Tatabanya, Hungary, for the construction of another factory on the location. 

Kinstellar has advised GTT Communications on the USD 2.15 billion sale of its business infrastructure in Central, Southern, and Eastern Europe to I Squared Capital. Linklaters advised the buyer on the deal.

Varga Mihály, Minister of Finance submitted the autumn tax changes package to the Hungarian Parliament, including the proposed changes for VAT in 2021. The draft contains detailed implementing rules for the EU e-commerce package and related administrative requirements, as well as several additional changes to the Hungarian VAT Act, as follows:

Cybersecurity is becoming increasingly important, especially in the automotive industry, which is reinventing itself. Connected cars, autonomous systems, electric cars and personal mobility systems all rely heavily on software. Today’s car has about 300 million lines of software code (compared to an average PC operating system’s 40 million) which makes it vulnerable to various cyberattacks. No unified regulatory framework or even technical standards currently exist.

The European Court of Justice has just put an end to an uncertainty that has weighed heavily on the pockets of property developers for years. Not only did it confirm that the VAT on what are known as “public purpose” investments can be deducted, but also that the obligatory transfer of ownership of such investments does not give rise to a VAT liability even if the investment is essential for the developer’s own economic activity.

SBGK’s busiest practice over the last few months has been Data Protection, according to Partner Andras Gyorgy, driven by both the COVID-19 pandemic and, more importantly, by fines for GDPR breaches raising awareness among companies.

During the state of emergency in the spring Gov. Decree no. 227/2020 (“Gov. Decree”) was introduced to require the notification to the Minister of Innovation and Technology (“Minister”) and the acknowledgment by the Minister as a condition to certain foreign investments in Hungarian-based companies. Following the end of the state of emergency subchapter 85 of Act LVIII of 2020 (“Vmtv.”) prescribes the rules applicable to foreign investments which are mostly similar to the rules established by the Gov. Decree.  However, in some matters the Vmtv. prescribes different rules. Now, certain provisions of the Vmtv. have been amended and supplemented by Act CIV of 2020 and the amendments have entered into force on 30 October, 2020.

Lakatos Koves & Partners has advised Innobyte on the sale of a majority stake in the company and its Innoware subsidiary to IT company 4iG. Following the approval of the Hungarian Competition Office, the transaction closed in October. Kertesz and Partners reportedly advised 4iG on the deal.

As of 1 September 2020, Hungary closed its borders to non-Hungarian citizens again. The rules abolished the tricolour system of green, yellow and red countries qualifying literally all countries as red. The rules introduced then – by a recent legislative amendment – remain in force until 1 December 2020.

Handover of pubic investment – creating access roads, utilities, etc. – to the local municipality or to the state for free is required in many cases by law in Hungary. According to the current interpretation of the tax authority and courts in Hungary, such handover triggers VAT payment obligation for the real estate investor (given that VAT was previously deducted in this regard). Since – in most cases – the real estate investor is unable to charge the VAT to the municipality or the state respectively, VAT was practically its loss in such cases.