In February the Hungarian Parliament adopted amendments to certain financial laws related to the new Civil Code.
Corporate income tax. Among others the new Act establishes that from 15 May 2010, the rules on the accounting of grants or support provided to foreign persons or entities whose places of management are in a foreign country will become more stringent.
Under the current regulations (in effect since 1 January 2010), a non-repayable grant or support or an asset that is transferred without consideration, or liabilities assumed or services provided free of charge, qualify, under certain conditions, as business expenses if Hungary has a double taxation agreement with the recipient’s country. Under the new regulations grants or support provided by a Hungarian company to a company that is resident in a country with which Hungary has a double taxation convention in force will no longer qualify as business expenses.
Liability of legal persons. The current Civil Code does not contain a general rule on how members of legal persons can be held liable for obligations incurred by the legal person of which they are a member. The rules on members’ liability are contained in separate provisions for specific types of legal persons. These separate provisions usually stipulate that a legal person is responsible for settling its debts from its own assets while its members may only be held liable under certain exceptional circumstances.
The new Civil Code expressly contains the general rule that legal persons are responsible for settling their debts from their own assets, while members of legal persons cannot be held liable for such debts (unless otherwise provided by law).
In addition, the new Civil Code reproduces the existing Civil Code provision under which the state qualifies as a legal person and is therefore obliged to assume liability for any claims for compensation or indemnification that may arise from its contractual obligations, the lack of budgetary resources notwithstanding.