Blog articles #hungarian

The Competition and Markets Authority has updated its November 2017 #GVH #Compliance #Opinion Leaders briefing ,which is summarised below. It is important to note in advance that the Competition Authority's recommendation is based solely on the provisions of Act XLVII of 2008 on the Prohibition of Unfair Commercial Practices against Consumers, but other legislation may also apply to influencer marketing (Civil Code, Civil Code, Children's Act, tax legislation, etc.).

According to the Fttv., individuals who promote third party products on their own social networking sites for a fee are considered opinion leaders (influencers). In addition to a monetary benefit, the remuneration may include, for example, the provision of a discount, a free product or service to the influencer, an invitation to a trip, etc.

If the influencer displays content for consideration, any form of business relationship or cooperation with the advertiser must be clearly and precisely identifiable and, where possible, ensure that consumers are presented with the same indication of the business relationship within a platform.

Any reference to an advertisement in a language other than Hungarian will only be accepted if it is made in the language of the content published by the advertiser.

In the absence of an advertising label to indicate the content, it is recommended that, in the case of content that only displays text, the reference to the consideration should be displayed in a way that is appropriate to the length of the text, clearly visible, separate from the text, and before any further clicking or scrolling requiring consumer intervention.In the case of stories, it is recommended to indicate the fact of consideration by direct textual indication on the image or video and by a narrative attention-grabber. It is important that the textual indication is at least as prominent as other textual elements in the image or video.

It is expected that the opinion leader has actually experienced and tried the product or service being promoted, and that his or her statements reflect his or her personal experience of the product, thus presenting a true picture to his or her followers.

The GVH has recommended that advertisers and the agencies that assist them develop contractual terms and conditions and processes or compliance programmes to ensure that they are aware of the legal requirements. The Competition Authority also included in the Recommendation the establishment of an appropriate monitoring system and reporting process, the setting of industry standards and the establishment of control points.

Dr. György Zalavári LL.M.
Ecovis Zalavári Legal Hungary
Lawyer | Mediator | Corporate Law and Data Protection Specialist
gyorgy.zalavari@ecovis.hu

Pursuant to the relevant Act, in business advertising published in a press product, radio or television programme in Hungarian, or in an outdoor advertising medium, the text of the advertisement, including the slogan, must appear in Hungarian, with the exception of the name of the business, its designation or the trade mark, regardless of the method of publication.

Dr. György Zalavári, lawyer, explains that this requirement may be fulfilled by displaying both the foreign language texts and their Hungarian equivalents in the same advertisement. The Hungarian and the foreign language text must be equally noticeable and must be displayed in the same size.

This provision does not apply to advertising published in foreign language sections, supplements or special editions of press products published in Hungarian, or in, immediately before or after, radio or television programmes in foreign languages.

The name of the shop, with the exception of the name of the business, the motto and the indication of the goods sold in the shop, as well as the notices in the shop or in the shop window intended to inform consumers, must always appear in Hungarian on the shop signs. This may also be accepted if, in addition to the foreign language text, the Hungarian equivalent of the same sign is displayed in the same prominent position and in the same size.

Signs in Hungarian must be displayed in public places, public buildings, private places and buildings open to the public, which are intended to inform citizens, and on public transport vehicles, which contain notices intended to inform passengers about road safety or the use of public transport, which are not economic advertising.

In the case of original signs on areas, buildings and structures protected by legislation on the protection of cultural heritage, the display of the text in Hungarian is not compulsory.

Established foreign language expressions are not considered as foreign language text. If there is doubt as to the rootedness of a foreign language term or as to the linguistic accuracy of the Hungarian translation, the competent authority shall take as a basis the opinion of the advisory body appointed by the President of the Hungarian Academy of Sciences.

These requirements do not affect the rights of national minorities with regard to economic advertisements and signs in the national language in municipalities where the national minorities concerned have a national minority self-government. These provisions will be monitored by the consumer protection authority.

Dr. György Zalavári LL.M.
Ecovis Zalavári Legal Hungary
Lawyer | Mediator | Corporate Law and Data Protection Specialist
gyorgy.zalavari@ecovis.hu

In essence, the limitation period is when a claim ceases to be enforceable after a certain period of time. This limitation period starts to run when the claim becomes due, i.e. when it should have been paid.

Normally, claims are time-barred after 5 years. The applicable legislation itself sets a different period from the general five-year limitation period in certain situations.

For example, the right to claim tax is subject to a limitation period of five years from the last day of the calendar year in which it is due, i.e. in practice six years. It is also worth noting that claims arising from the supply of electricity or gas are subject to a limitation period of 3 years, while claims relating to the supply of telephone or television services are subject to a limitation period of 1 year.

But is it possible to agree in a contract between the parties to apply a shorter or longer term than the law in a specific, individual legal relationship? 

The question arises because the Civil Code also contains the principle of freedom of contract, which means that in the vast majority of cases, where the law does not prohibit derogation, we are free to decide whether to conclude a contract, with whom to conclude it and with what content.

Dr. György Zalavári, lawyer, points out that this is possible; the principle of freedom of contract can also be applied in relation tolimitation periods, and the contracting parties may derogate from the original rules of the Civil Code. Such an agreement changing the limitation period must be in writing.
A limitation is that an agreement that completely excludes the statute of limitations is void, but the claim may be time-barred after a very short period of time, even a few weeks, if the agreement says so.It is important to note that in general, a time-barred claim cannot be enforced even in court proceedings. However, the fact that the statute of limitations cannot be taken into account ex officio by the judge or the administrator in judicial or administrative proceedings must be expressly invoked by the party concerned. The court or administrative authority is not entitled to draw attention to this as a guarantee of impartial judgment or administration.

It should also be noted that during the limitation period, certain measures interrupt the running of the limitation period, in which case the limitation period starts to run afresh, and that the limitation period is suspended in certain circumstances, in which case the time limitation period does not run.

Dr. György Zalavári LL.M.
Ecovis Zalavári Legal Hungary
Lawyer | Mediator | Corporate Law and Data Protection Specialist
gyorgy.zalavari@ecovis.hu

Once a company has been set up, there are many situations in the life of a business where it may be necessary to register changes to company details. These changes can be, for example, a change in the name, address or principal activity of the company, or an increase or decrease in the subscribed capital or even the cancellation of the company.

The business register contains the date of the change in the company data. The change of data may differ in terms of when it takes effect (from when it is effective) and when it is actually registered by the court. In the absence of an indication of the date of the change or in the case of contradictory information, the date of the change in the business register is normally the date of the underlying decision.However, there is one exception: the company cannot determine the date of the reduction of the share capital in advance, the date of the change being the date of registration with the court. 

The company may, with certain exceptions, specify the date of the change in advance in the application for registration of the change. However, this may not be earlier than the date of the decision giving rise to the change. In a typical case, this would be the planned date of registration of the transformation.

A frequent source of uncertainty for company directors is whether the new data (e.g. new company name, registered office) can be used in the company's affairs after the decision on the change of company data has been taken, but before it is registered. At that time, the new information is not yet included in the business register as part of the registered data, but can be found in the business database only by means of the remark "under registration".

In connection with the data registered retroactively to the date of the amending, company ownership resolution, Dr. György Zalavári, lawyer, recommends that both the old and the new data be entered in the official documents during this transitional period.

If you have any legal questions regarding company law, please contact the author of this article, Dr. György Zalavári, lawyer.

Dr. György Zalavári LL.M.
Ecovis Zalavári Legal Hungary
Lawyer | Mediator | Corporate Law and Data Protection Specialist
gyorgy.zalavari@ecovis.hu

Whether a company or other organisation is being established, an application for the organisation's tax number must be submitted to the state tax and customs authority at the same time as the application for registration is submitted to the registration authority.

If the VAT liability of the organisation being established is not excluded, given that it does not carry out any economic activity within the meaning of the VAT Act or carries out only activities of public authority, it must declare how the VAT liability is to be determined. The VAT liability can be established on the basis of the general rules, but under the VAT Act there are also a number of other options available.

It is often the case that the optimum form of taxation for the business is not fully developed when the business is set up, or that new activities are added to the business, which justify a different form of taxation. However, it is not usually possible to change the way in which VAT is calculated until the first day of the year following the year in question.

The possibility to amend the declaration made at the time of filing is provided for by Section 257/F of the VAT Act to eliminate the failure to file a declaration at the time of establishment or even the failure to file a declaration at the time of establishment: 'The taxpayer may initiate the amendment of the declaration made at the time of filing by means of a correction request submitted to the state tax and customs authority prior to the commencement of the subsequent tax audit of the returns, within the limitation period for the right to tax assessment, in accordance with Section 20 (5), Section 30 (4), Section 45/A. § 80(2)(b), § 80/A(1), § 88(1), § 192(1), § 196/G(1), § 197(1), § 212/A(1), § 218(1), § 220(1), § 224. § (1), provided that the amendment does not affect the amount of the taxable amount, the tax payable and the input tax deductible which he has determined and declared."

The request for rectification may be made to amend declarations relating to intra-Community acquisitions of goods, the place of supply of services, the assessment of the taxable amount in forints, the taxable amount of supplies and leases of immovable property, the exemption from taxable persons and the choice of cash accounting, and the taxable person and reseller status of agricultural activity.

The possibility to submit a request for correction is therefore not unlimited in time: it is possible to do so within the limitation period for the right to assess tax, provided that the amendment does not affect the amount of the tax base established and declared by the taxpayer, the amount of tax due and the amount of input tax deductible.

The request for correction may be submitted on form 20T201T, provided that proof of either ad hoc or permanent right of representation (EGYKE) is provided to the NAV prior to submission; otherwise the request submitted will be considered invalid by the NAV.

Dr. György Zalavári LL.M.
Ecovis Zalavári Legal Hungary
Lawyer | Mediator | Corporate Law and Data Protection Specialist
gyorgy.zalavari@ecovis.hu