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The business or economic purpose of entry must be substantiated for the exemption



In order to ensure the smooth operation of the Hungarian economy, from 5 September the Government allowed unrestricted business entry from abroad. The specifications on the detailed conditions for the exemption can be found below.

An amending decree was issued on 4 September, setting out specific provisions in terms of entering the country for general or business purposes, in addition to the already existing stipulations of Gov. Decree 408/2020 (VIII. 30.) on travel restrictions during the state of disease control preparedness.

 

Based on this, from 5 September 2020, all those who wish to travel to the territory of Hungary for business or economic purposes will be required to comply with the provisions of Section 10/A and 10/B of the Decree. The regulation deals separately with Hungarian citizens wishing to return to Hungary and with foreign citizens wishing to enter, and allows both entities to enter Hungary without restriction, provided that the person concerned justifies the business and economic purpose of the trip upon entry.

A certificate is required for exemption

According to the provisions, both Hungarian and foreign citizens have the opportunity to enter without restriction, however, the regulation makes all this subjected to a credible proof of business or economic purpose. Furthermore, the regulation stipulates that, if there is any doubt at the time of entry regarding the authenticity of the justification of the reason, the general rules must be followed, i.e. the exemption from the restrictions on entry cannot apply in this case.

As the exemption is not automatic but conditional on the fulfilment of certain conditions, it is important that travellers pay attention to the full fulfilment of these conditions.

What can be considered a business or economic purpose?

With regard to traveling for business or economic purposes, the question may arise as to what actually qualifies as a business or economic purpose.

The Regulation does not contain any rules in this regard, but these concepts are provided for in other legislation.

Pursuant to Subsection 10 of Section 3 of Act CXVII of 1995 on Personal Income Tax (hereinafter: the PIT Act), “travel for the purpose of obtaining personal income, performing a task related to the activities of the payer (with the exception of visiting the place of work, the registered office or the site from the place of residence) including, in particular, travel for the purpose of secondment or work with another employer within the framework of an employment relationship other than the employment contract…” shall be considered as official, business travel.

 

We can also read the definition of economic activity in the PIT Act, according to which “any commercial, permanent or regular activity is considered as an economic activity if it is aimed at or results in obtaining consideration and is carried out in an independent form”.

 

Not only the PIT Act but also Act CXXVII of 2007 on value added tax (hereinafter: the VAT Act) specifies what is considered as economic activity, Section 6 (1) of which defines in the same way as the PIT Act what can be considered an economic activity. According to Section 6 (2) of the VAT Act, “economic activities include, in particular, industrial, agricultural and commercial activities aimed at production, distribution, as well as other service activities, including activities carried out as intellectual freelancers”.

 

Based on the above definitions, when assessing the business or economic nature of the travel, it is appropriate to consider whether the travel is for or related to the business, profit or income of the economic operator or other entity.

 

It is advisable to use the officially published certificate template

 

In case of business or economic nature of the travel, the Regulation does not contain detailed rules on the details of issuing the certificate, but for work and other business, economic travel (e.g. meeting, participating in exhibitions, purchasing raw materials, etc.) it is worthwhile for travellers to to request a certificate as a private document with conclusive evidence (duly signed by the representative of the company) from their employers or the legal entity for which the trip is made. In order for the document to be suitable for proving the business or economic purpose of the travel, the specific reason (purpose) for entry must also be indicated.

 

In the case of business and economic travel, it is advisable for all travellers and companies, as well as other legal entities, to pay careful attention to whether the travel is truly business or economic in nature and, if so, to pay special attention to the certificate required by the Regulation.In order to facilitate this, and for the purpose of issuing the certificate, those concerned have the option to download the official document template, which can be DOWNLOADED HERE, and which will soon be available also on the police.hu website.

 

The regulation provides for transit passengers as follows:

 

Non-Hungarian citizens arriving from abroad may enter the territory of Hungary as passengers for the purpose of transit if they submit to a medical examination upon entry and the medical examination does not establish the suspicion of infection.

An additional condition for entry is that the non-Hungarian citizen coming from abroad:

a) shall meet the entry conditions provided for in the Schengen Borders Code,

 

b) shall confirm in a credible manner the purpose of the travel and the country of destination of the travel;

 

c) can enter the country of destination and, for this purpose, enter into a state neighbouring Hungary, which is on the route of the planned journey.

 

The National Chief of Police shall publish the road border crossing points for the entry and exit of transit traffic, the route of the transit traffic, the rest areas and the time frame available for leaving Hungary on the official website of the police.

Detailed rules of transit:

During transit through Hungary, a non-Hungarian citizen may only travel on the route specified by the National Chief of Police and, with a narrow exception, may stop at rest areas specified by the National Chief of Police and only for reasons strictly necessary for accomplishing the transit, such as health or technical reasons. Transit passengers must leave the territory of Hungary within the time limit set by the National Chief of Police, but not later than within 24 hours.

In addition to stopping at a specified rest area, a transiting non-Hungarian citizen may interrupt and stop the journey on the specified route only in a technical or medical emergency requiring immediate intervention.