State aid: Commission approves €478 million Hungarian scheme to support small and medium-sized enterprises affected by coronavirus outbreak

The European Commission has approved an approximately €478 million (HUF 214 billion) Hungarian scheme to support small and medium-sized enterprises (‘SMEs’) affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework. Under the scheme, the public support will take the form of a reduction of the local business tax rate to 1% and a 50% reduction in the advance payments of the local business tax. The scheme aims to provide relief and liquidity to SMEs in order to mitigate the effects of the coronavirus outbreak. The Commission found that the Hungarian scheme is in line with the conditions set out in the Temporary Framework. In particular, (i) the aid will not exceed €200,000 per company active in the primary production of agricultural products, €240,000 per company active in the fishery and aquaculture sector, and €1,600,000 per company active in all other sectors; and (ii) the scheme will run until 31 December 2021. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measure under EU State aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.60910 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.