Ministry: Brussels ‘practically destroyed’ Hungary’s voucher system

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After submitting a bill to Parliament yesterday that would convert a portion of the national voucher system into cash, the National Economy Ministry said in a statement that the changes were necessary because Brussels had “practically destroyed” Hungaryʼs voucher system, according to a report by Hungarian news agency MTI.

“The governmentʼs aim was to establish a new system that would make the interests of the Hungarian people a priority, while complying with EU rules,” the ministry said, according to MTI. “For the same reason, the government has decided that Hungarian employees should get a part of the vouchers awarded up until now in cash,” it added. 

The European Court of Justice ruled on February 23 that elements of the SZÉP leisure card and Erzsébet food-voucher systems, which enable Hungarian employers to offer their employees reduced tax benefits as part of Hungary’s unified voucher system, conflict with EU law.

The bill would set the annual limits on remuneration eligible for payroll tax preferences at HUF 450,000 for employees in the private sector and at HUF 200,000 for people who work in the public sector, according to MTI. It would allow HUF 100,000 of each of the amounts to be awarded in cash, while the rest would top up the SZÉP national voucher cards, MTI added. Employers would pay no tax on the vouchers and cash, while employers would pay 15% personal income tax and a 14% healthcare contribution on 1.19 times the amount awarded, MTI noted.

If the bill is passed by the Parliament, it will take effect on January 1.

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