CEE Legal Matters

Category: Hungary

  • Modifications Again Relating to the Formal Requirements of Using Witnesses in Hungary

    According to the current wording of the Code of the Civil Procedure, a private document, until proven otherwise, must have full probative force, verifying that the issuer has in fact made the statement that the document contains, or undertakes to consider himself bound by such statement, provided that the rules regarding the form of using witnesses is observed.

    We have reported in our previous newsletter about the new formal requirements of using witnesses defined by the new Code of the Civil Procedure applicable from 1 January 2018. According to the original wording of the new act, the name and the address of the witnesses should be handwritten under his/her signature and must be readable. However, before the Code of the Civil Procedure entered into force on 1 January 2018, a new modification was approved by the Hungarian Parliament in November 2017 regarding the referred section. The new rules require only the readability of the name and the address of the witnesses, accordingly, the handwriting is not required for the name and the address of the witnesses.

    By Rita Parkanyi, Partner, KCG Partners Law Firm

  • New Managing Partner at PwC Legal in Budapest

    New Managing Partner at PwC Legal in Budapest

    Reti, Antall and Partners, the Hungarian member of PwC Legal, has a new Managing Partner and a new Partner.

    The firm has announced that Zoltan Varszegi is taking over as Managing Partner from Laszlo Reti. Varszegi started his career as a trainee lawyer with the firm before spending a year and a half in-house at OTP Bank, then spent four and a half years in PricewaterhouseCoopers’ tax department. He has been back at Reti, Antall & Partners since 2000. According to the firm, “his professional activities are mainly focused on the development of international corporate structures, energy law transactions, civil lawsuits, and tax litigation.” The firm also reports that “recently, he has gained a reputation for representing his clients before the Court of Justice of the European Union.”

    Laszlo Reti and Gyorgy Antall started their cooperation as lawyers in 1987. Both Reti and Antall will continue to work at the firm.

     

  • CHSH and CMS Advise on CA Immo Sale of Inforpark A Office Complex in Budapest

    CHSH and CMS Advise on CA Immo Sale of Inforpark A Office Complex in Budapest

    CHSH has advised CA Immobilien Anlagen AG on the sale of the Infopark Building A office complex in Budapest from the Magyar Posta Takarek Ingatlan Befektetesi Alap real estate fund, owned by Magyar Posta and managed by Diofa Alapkezelo Zrt. CMS advised the sellers on the deal.

    Infopark Building A, which claims a floor area of 13,700 square meters, is located in Infopark, the first innovation and technology park in Central and Eastern Europe.  

    The Hungarian CHSH team was led by Budapest-based Partner Wilhelm Stettner.

    The CMS team included Partner Jozsef Varady, Senior Associate Andras Klupacs, and Associates Zsafia Zsurzsa and Nora Devenyi.

     

  • Invoice Data-Reporting Obligations from 1 July 2018 in Hungary

    Based on the recently modified Hungarian VAT Act, in case of invoices issued in connection with transactions between resident taxpayers, the issuer of the invoice is obliged to report data from the invoice to the tax authority if the output tax is equal or above HUF 100,000. The goal of this obligation is the reduction of tax evasion and the whitening of the economy. 

    The data-reporting can be carried out on a special online surface in case of paper invoices, or, in case of electronic invoices, by the invoicing system itself. The deadline of data-reporting depends on the type of the invoice and the amount of the output tax. In case of a paper invoice containing more than HUF 100,000, but less than HUF 500,000 of output tax, the data have to be provided to the tax authority within 5 days from the date of issuance of the invoice. If the output tax is equal or above HUF 500,000, the data have to be provided on the following day of the issuance at the latest. The data of electronic invoices have to be sent to the tax authority upon their issuance.

    Failing to provide the data required, or in case of delayed or incomplete performance, the taxpayer can be fined by the tax authority. The maximum amount of the fine is HUF 200,000 for individuals and HUF 500,000 for other taxpayers. It is important that the fine is imposed after each invoice concerned. Therefore, it becomes useful for the taxpayers to obtain an invoicing system having the function to automatically provide the data required from each invoice to the tax authority.

    By Gabriella Galik, Partner, KCG Partners Law Firm

  • The Electronic Procurement System Is on the Horizon in Hungary

    According to a recent proposal submitted to the Hungarian Parliament, the Hungarian Government intends to launch the electronic procurement system in April 2018.

    In order to reach compliance with the relevant EU Directives, electronical communication must be ensured in all Hungarian procurement process. Currently there is a test period granted until April 2018 by the Hungarian Government for the participants, during which both electronic and paper based communication forms are available. The test period serves to give chance for the participants to get familiar with the electronic procurement system and to facilitate the turnover.

    The aim of the central, common state electronic procurement system is to improve transparency, to decrease administrative burdens, to accelerate the process and to simplify the procedural steps. 

    By Eszter Kamocsay-Berta, Partner, KCG Partners Law Firm

  • Weil’s Budapest Office Flies to Bird & Bird

    Weil’s Budapest Office Flies to Bird & Bird

    The entire Budapest office of Weil, Gotshal & Manges, led by Partners David Dederick and Konrad Siegler and including three other senior counsel and 15 lawyers and the entire office staff, will join Bird & Bird in Budapest on February 1. Weil will close its Budapest office.

    David Dederick, who currently manages Weil’s Budapest office, has been with the firm since 1999. He will serve as Co-Head of Bird & Bird’s Budapest office, alongside London-based Bird & Bird Partner Peter Knight.

    Siegler joined Weil in 2004 from Baker McKenzie.

    Knight commented on the move: “The appointment of David Dederick, Konrad Siegler, and their team will significantly increase Bird & Bird’s presence in the Hungarian market and our clients will benefit vastly from the far wider range of services we are now able to offer them. These appointments will allow the combined team to provide deeper and more extensive services across multiple sectors. Strengthening our office in Budapest will benefit our regional strategy within Central and Eastern Europe. We are very excited to welcome our new colleagues, and we will work together to ensure the new combined larger team goes from strength to strength.”

    Dederick added: “I am very excited to join the Bird & Bird team in February. The firm’s international footprint, truly deep sector expertise, and the sense of collaboration across their 29 international offices is what struck us as being so appealing. We are particularly impressed with the firm’s focus on technology, both as a sector and in client service. We look forward to working with our new colleagues in Budapest and around the world to increase the opportunities and services available to clients based in Hungary and the Central and Eastern European region.”

    The three senior counsel joining Dederik and Siegler are corporate lawyers Pal Szabo and Ferenc Matrai and dispute resolution specialist Laszla Nanyista. Of the other 15 lawyers, ten are associates and five are trainees. The newly combined Bird & Bird team has 29 lawyers.

    According to the Bird & Bird press release, the new Bird & Bird operation “will continue to work closely with Weil, Gotshal & Manges.” 

     

  • Dentons and CMS Advise on Credit Facility Deal for MOL

    Dentons and CMS Advise on Credit Facility Deal for MOL

    Dentons has advised the London branch of UniCredit Bank AG and MUFG as coordinators on a EUR 750 million revolving credit facility provided by a group of 13 banks to MOL Plc, the Hungarian multinational oil and gas company. CMS advised MOL on the deal.

    The new facility was arranged as a club deal with a group of MOL’s relationship banks. It has a tenor of five years (with two one year extension options), and can be drawn in both euros and US dollars. Societe Generale acted as the facility agent.

    The Dentons team advising UniCredit and MUFG was led by London-based Partner Lee Federman and Budapest-based Partner Gergely Horvath, supported by London-based Associates Alistair Stoddart and Emily Higgins.

    CMS’s team included Bucharest-based Partner Simon Dayes and Budapest-based Partner Erika Papp and Consultant Stefania Lepore.

     

  • DLA Piper Advises on ENI Gas Distribution Operations Disposal in Hungary

    DLA Piper Advises on ENI Gas Distribution Operations Disposal in Hungary

    DLA Piper has advised Eni regarding the disposal of its shares in Tigaz Group. The buyer, MET Holding, was advised by Kinstellar. 

    Based on the deal announced on December 18, 2017, Eni and MET Holding agreed on the sale of 98.99% of Tigaz Zrt — including Eni’s gas distribution operations in Hungary through its participations in Tigaz DSO and Turulgaz — to MET. The value of the deal was not disclosed.

    According to the Eni press release, the agreement was reached following a competitive tender and says that, “through this deal, Eni completes its exit from the gas sector in Hungary in line with its disposals and asset rationalization plan. The exit process started in 2016 with the disposal of Eni’s gas marketing activities in Hungary in both free and regulated markets.”

    The DLA Piper team consisted of Country Managing Partner Andras Posztl, Counsel and Head of Energy in Hungary Gabor Simon, and Senior Associate Gabor Spitz.

    The Kinstellar team was led by Partner Anthony O’Connor and included, among others, Partners Kristof Ferenczi and Peter Voros and Managing Associate Balazs Sepsey.

     

  • Dentons Advises Enterprise Investors on Exit from Netrisk.hu

    Dentons Advises Enterprise Investors on Exit from Netrisk.hu

    Dentons has advised Enterprise Investors on the sale by its Polish Enterprise Fund VI of 100% of shares in Netrisk.hu to MCI.EuroVentures of MCI Capital Group. Deloitte Legal reportedly advised the buyers on the transaction, which is valued at EUR 56.5 million. 

    Enterprise Investors is one of the largest private equity firms in Central and Eastern Europe. Active since 1990, the firm has raised nine funds with total capital exceeding EUR 2.5 billion. These funds have invested EUR 1.8 billion in 139 companies and exited 126 companies with total gross proceeds of EUR 3.6 billion.

    In 2010, PEF VI acquired Netrisk.hu for EUR 23 million from the company founder and financial investors. According to an Enterprise Investors press release, “at the time of the investment, Netrisk.hu was the leading independent online insurance broker in Hungary, distributing almost exclusively compulsory MTPL auto insurance policies. After EI brought in a new management team to drive the company, Netrisk.hu started growing significantly as an online independent insurance market place in all non-life insurance products including MTPL, casco, home, property and travel insurance policies. It also developed new businesses lines. Today, in addition to maintaining its top market position as the leading online insurance broker, Netrisk.hu is also one of the largest online marketplaces for retail banking products and the largest company offering online comparison of telecom/cable, internet and TV packages in Hungary. Netrisk.hu’s number one market position is backed by strong financial results. In 2016 the company generated EUR 8.8 million in revenues, and this year it is expected to grow revenues by 23%.”

    The Dentons team was led by Partner Edward Keller, supported by Partner Annamaria Csenterics, Counsel Marton Kertesz, and Associates Sean Huber and Reka Szaloky.

    Editors Note: After this article got published, Deloitte Legal confirmed its involvement in the transaction. Their team advising the buyer was led by Partner Pawel Moskwa, Partner Associates Karol Kicun and Maciej Wroblewski, assisted by Senior Managing Associate Lukasz Szymanski, Senior Associates Augustyna Wrobla and Mariusz Banasia, and Associates Katarzyna Mazur and Diana Sofu. Apart from Deloitte Legal Poland, the Hungarian office of Deloitte was also involved in the transaction.

     

  • Deletion Instead of Suspension of Tax Number From 1 January 2018 in Hungary

    According to the bill on the new tax procedural rules entering into force on 1 January 2018, a tax number cannot be suspended by the tax authority any longer. The bill is now before the Hungarian Parliament under discussion. 

    According to the current provisions, the suspension of a tax number functions as a sanction, for example in case the official documents cannot be delivered to the taxpayer or if it is not available on its registered seat. Taxpayers with suspended tax numbers have limited rights (e.g. in case tax refund or when exercising the right of tax reduction, etc.), however, they may pursue business activities, and they must fulfil their tax obligations. With regard to the fact that in practice it is difficult to interpret this sanction by the taxpayers, and the duration of the suspension is usually short, which is not in compliance with the periods for tax assessment and tax returns, this sanction is planned to be ceased by the bill. Bad news is that in cases where tax suspension would be applicable under the current rules, the bill orders the sanction of the deletion of the tax number. 

    It is likely that the Hungarian VAT Act will also be modified in connection with tax suspension. However, it is also likely that the sanction of the VAT Act, according to which the right of tax deduction expires in case the tax number is deleted by a final decision, will remain in force.

    By Eszter Kamocsay-Berta, Partner, KCG Partners Law Firm