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The previous parts of the series guided readers from the legal framework of pay transparency to practical implementation: we discussed the expected directions of Hungarian implementation, reporting obligations and joint pay assessment, the measurement of organisational readiness, as well as the decision-support role of data-driven pay equity analyses.
However, these steps only function sustainably if the related information reaches the relevant stakeholders in an appropriate manner. The fifth part therefore focuses on the communication requirements of the Pay Transparency Directive: how information towards authorities, employees and individual stakeholders must be organised, and how this can be supported by a conscious, HR-led communication practice.
External, internal and individual-level communication
Mandatory information provision appears at three clearly distinct communication levels.
External communication
Employers must make reports on the gender pay gap and related measures available to authorities and supervisory bodies in accordance with legal requirements. In certain cases, regulation may also prescribe public disclosure.
The primary objective of external communication is to ensure transparency and accountability; therefore, the accuracy of data, consistent interpretation and proper contextualisation are of particular importance.
Internal communication
Employees must be regularly – presumably at least annually – informed about their rights under the Directive, the company’s pay equity position, and the measures initiated or planned.
The objective of internal communication is to ensure that employees understand how pay transparency functions and do not encounter the results as isolated figures, but as part of a broader corporate effort.
Individual-level communication
Under the Directive, individual employees are entitled to request written information about their own pay level as well as the average pay of colleagues of the opposite gender performing the same or work of equal value. The employer must provide this information within a prescribed “reasonable” deadline.
This level requires the greatest caution, as it simultaneously involves data protection, legal and trust-related considerations.
Employees’ rights to information
The Directive strengthens employees’ right to information. Employees may request that the employer:
- provide written information on their individual pay level,
- disclose the average male–female compensation within comparable employee categories.
National regulation is expected to also prescribe automatic, regular (annual) information provision, offering a summary picture of the company’s pay equity situation and the measures applied.
Employees may, through their representatives, access additional information, such as:
- the pay evaluation methodology,
- the categorisation applied,
- complaint handling and enforcement channels.
This justifies the establishment of structured dialogue with trade unions, works councils or employee delegates.
Communication risks: when the system “explodes”
Based on international experience, communication risks related to pay transparency often become unmanageable when an organisation reacts solely under external pressure. Several large corporate cases demonstrate that unprepared data disclosure resulted in reputational damage, legal disputes and prolonged organisational restructuring.
In contrast, organisations that conducted internal audits prior to mandatory regulation, established transparent salary bands and consistently communicated their pay equity results tend to face more manageable legal risks and enjoy stronger employer trust.
Thus, communication risk lies not primarily in the numbers themselves, but in their interpretation and timing.
HR communication strategy and practical steps
HR plays a key role in ensuring that pay transparency does not appear merely as a compliance obligation, but as an organisation-wide, trust-building process.
In practice, this may be built on the following elements:
- clear leadership messages explaining why pay equity is important and how it connects to corporate values,
- clear and visual materials (infographics, Q&A documents, intranet pages),
- dedicated channels and responsible persons for handling salary-related questions and complaints,
where necessary, - the provision of anonymous reporting options.
One of the prerequisites for successful communication is that pay transparency is presented not as a “salary problem”, but as an organisational development programme built on fairness and consistency.
The role of communication in sustainable compliance
In the long term, pay transparency operates stably if mandatory information provision becomes integrated into the company’s daily communication practice. Consistent, understandable and forward-looking communication reduces the likelihood of misunderstandings, supports the acceptance of managerial decisions and contributes to maintaining employee trust in a changing regulatory environment.
Data-driven pay equity analysis and decision support
In the previous three parts, we examined the EU legal framework of pay transparency, the expected directions of Hungarian implementation, as well as the key steps of practical preparation: from reporting obligations and joint pay assessment to the role of job structures, salary bands and readiness audits. The next step is to connect all of these at the level of data. In order to meet the requirements of the Pay Transparency Directive, organisations must develop data-driven analytical capabilities that are not only operational from a compliance perspective, but are also capable of providing reliable signals about risk areas and supporting meaningful managerial decisions.
Unadjusted and adjusted pay gap
In practice, the gender pay gap should be examined at least at two levels.
Unadjusted pay gap
The simple difference between the average or median pay of men and women within a given organisational unit or employee group.
Adjusted pay gap
The result of a statistical analysis (for example a regression model) that takes into account relevant explanatory factors such as job, level, region, length of service, education or competency level.
From an HR perspective, it is important that the roles of the two indicators are clearly separated. The unadjusted pay gap is a useful “red flag” indicator that draws attention to potential problems. However, assessing differences that may indicate discrimination is only possible after isolating explanatory variables. This helps avoid excessive reactions and also prevents real risks from remaining hidden.
Explanatory variables and data strategy
The quality of pay equity analysis largely depends on which variables are included in the analysis and at what level of data quality. Typical explanatory factors may include:
- gender, organisational unit, place of work,
- age, education, employment relationship,
- length of service at the company and in the position,
- job and career level,
- performance evaluation results, promotions,
- competency levels,
- longer absences (for example illness, maternity leave).
HR should develop a conscious data strategy:
- which variables must be collected,
- what quality control procedures are applied,
- who is responsible for data integrity,
- how long historical data are retained,
- how GDPR-compliant use can be ensured (pseudonymisation, aggregation, access control).
Employee categories and sample size
One of the critical points of pay gap calculation is the definition of analytical categories. Groups that are too large may conceal local problems, while groups that are too small may compromise statistical reliability.
In practice, the following considerations help to find the right balance:
- categories should be homogeneous in terms of job level, responsibility and operational area,
- they should contain a sufficient number of employees to ensure stability of average and median values,
- they should fit the organisation’s natural management structure so that responsibility can be assigned for the results.
A good approach is for HR to test several categorisation methods in a pilot manner and select the one that provides interpretable and actionable results.
Pay structure modelling and benchmarks
Pay equity analysis can always be interpreted in the context of the overall pay structure. Modern compensation systems are built on regularly updated salary bands defined by job and function, supplemented with market benchmark data.
Among HR’s tasks are:
- comparing the midpoints of internal salary bands with relevant market medians,
- examining how different groups are positioned within the bands,
- identifying areas where women are typically positioned lower within the band than men.
This approach helps to separate market competitiveness issues from equal opportunity risks.
Analytical tools, dashboards and HR decision support
In larger organisations, dedicated pay equity platforms and BI-based dashboards are increasingly common, visually displaying pay gaps, risk groups and possible intervention points.
As an HR leader, it is advisable to:
- establish a unified pay equity reporting package (executive summary, detailed breakdowns, trends),
- jointly design the reporting architecture with finance and IT,
- integrate regular (annual or semi-annual) pay equity reviews into strategic workforce planning.
Analytics create real value when results are linked to concrete decisions: targeted salary adjustments, modification of promotion practices, supplementing leadership bonuses with equal opportunity indicators.
HR controlling and accountability framework
In the long term, pay transparency becomes a sustainable practice if it is integrated into HR controlling routines. This requires a clear allocation of responsibilities:
- who is responsible for the data,
- who is responsible for the methodology,
- who monitors legal compliance,
- who prepares managerial decisions.
Pay equity indicators incorporated into leadership scorecards signal that the organisation treats the topic as a strategic issue. In this way, pay equity analysis does not remain a one-off project, but becomes a continuously developed, data-driven operational practice.
The place of the data-driven approach in organisational operations
Pay equity analysis fulfils its real function when it provides regular, reliable and interpretable information to decision-makers. A data-based approach creates the opportunity for compliance, employee experience and employer branding to become mutually reinforcing elements within a more transparent operational framework.
Readiness audit for Hungarian employers
The application of the Pay Transparency Directive does not represent a single legal step for organisations, but rather the conscious transformation of interlinked HR processes. The focus of the third part is on how the requirements of the Directive can be embedded step by step into everyday operations. The emphasis is on the readiness audit: those few critical HR areas where timely, structured development can prevent rushed implementation and later compliance risks.
Job system – putting the structure in order
One of the fundamental conditions of the Directive is that equal or work of equal value must receive equal pay. This requires a clear, objective and consistently applied job structure.
Its main elements:
- defined job families and levels (for example junior–senior, expert and managerial career paths),
- uniform job descriptions that record tasks, areas of responsibility, decision-making authority and required competencies,
- transparent classification principles that can be applied regardless of gender, age or length of employment.
In practice, this often means a “job system clean-up” for many organisations: restructuring fragmented positions developed over the years, eliminating duplications and establishing a unified naming logic.
Job evaluation and the establishment of salary bands
One of the key steps in preparation is selecting a methodologically sound job evaluation system. In practice, several approaches exist: ranking, classification, analytical point systems or factor analysis based on external benchmarks.
HR’s task is to establish a solution that:
- fits the size and complexity of the organisation,
- is internally well communicable and understandable for managers,
- can be consistently applied to define “work of equal value.”
Based on the results of job evaluation, it is advisable to establish a banded salary table. Each band includes minimum–midpoint–maximum values, as well as a clear set of rules explaining why and how an employee is positioned within the band (entry salary, market correction, enhanced responsibility, scarce expertise).
Remuneration practices and reporting
Pay transparency affects the entire remuneration structure. Therefore, preparation includes a comprehensive review of existing practices and strengthening reporting processes.
It is worth paying particular attention to the following areas:
Objectivity and transparency
Do bonus and incentive systems create indirect pay gaps, for example due to KPIs that disadvantage one gender in certain roles?
Gender differences
Does the allocation of allowances, overtime pay, on-call fees and bonuses show disproportionality?
Data availability
Are HR and payroll systems capable of automatically generating the indicators required by legislation (average and median pay, benefits, headcount distribution)?
Reporting and monitoring
In preparation for mandatory reports from 2026, it is advisable already now to establish:
- standard dashboards for tracking salary and benefit data,
- time-series analyses to examine trends and the impact of corrections,
- automated reporting processes so that mandatory reports become the natural output of the system.
Recruitment, selection and employee communication
Pay transparency also places processes related to candidates on new foundations. HR must prepare to:
- communicate the starting salary or salary band in a predefined manner for each position,
- prepare hiring managers to handle salary-related questions without addressing prohibited topics,
- revise employment contract templates, offer templates and internal regulations.
Internal communication is also a key factor: it must be clearly explained what pay transparency means in practice and where the boundary lies between the protection of individual salary data and the right to collective information.
Readiness audit – where does the organisation stand?
In international consulting practice, a quick 20–25 question readiness audit focusing on five main areas is a widely used tool: job system, job evaluation, remuneration, reporting, recruitment and communication.
During an internal self-assessment, it is worth considering, for example, the following questions:
- is there an up-to-date, unified position architecture,
- is there a documented, objective job evaluation methodology,
- are regular gender-based salary and benefit reports prepared,
- do recruitment processes already reflect the principles of pay transparency.
The earlier deficiencies are identified, the easier it is to prepare in a scheduled and business-manageable manner for the obligations of 2026 and beyond.
The picture of organisational readiness comes together
Preparation for the introduction of pay transparency becomes a manageable process when the organisation is aware of its own level of maturity. The job structure, job evaluation, remuneration, reporting and communication together form the system on which legal compliance and long-term operational stability can be built. A conscious readiness audit can serve as a compass in this transformation.
In the first part of the series, we reviewed the framework of the EU Directive and how it affects Hungarian legislation. The next step is to present how all of this can be translated into practice: what reporting obligations need to be anticipated, when a joint pay assessment must be conducted, and how HR processes and systems can be transformed to support pay transparency.
Reporting obligation: who is concerned, from when, and what must be reported?
The Directive determines regular reporting obligations based on headcount thresholds.
Large companies: annual reporting obligation.
Medium-sized companies: mandatory reporting every three years.
Employers must make the report transparently accessible to employees and their representatives.
The report must contain at least the following elements:
- average and median pay gap broken down by gender,
- differences in supplementary and variable benefits,
- the proportion of women and men by job category,
- the distribution of employees within the pay structure.
The purpose of the report is twofold: on the one hand, it provides an accurate picture of the company’s pay structure; on the other hand, it serves as a basis for necessary interventions. For HR, this represents an opportunity to turn pay data into a management decision-support tool, rather than merely a compliance document.
Joint pay assessment: when is it mandatory and how should it be conducted?
A joint pay assessment must be initiated if, within a job category, the pay gap between genders reaches or exceeds the threshold defined in the Directive (expected to be around 5%), and the difference cannot be satisfactorily explained by objective factors.
The purpose of the process is for the employer, together with employee representatives, to examine:
- job requirements,
- salary bands and remuneration practices,
- performance evaluation and promotion logic,
- any structural or subjective distortions.
The outcome of the joint pay assessment is an action plan containing concrete, deadline-bound measures (for example, a salary adjustment programme), as well as preventive measures against future imbalances.
From an HR perspective, this is a complex compensation audit that examines remuneration, career paths, performance management and organisational decision-making in an integrated manner.
Job evaluation and salary architecture: the foundation of the system
One of the greatest practical challenges of the Directive is translating the concept of “equal work or work of equal value” to company level. This requires a clear and consistent position architecture that includes:
- job families and levels,
- areas of responsibility and decision-making authority,
- required expertise and competencies,
- levels of experience and knowledge.
Job evaluation (analytical point systems, factor-based, benchmark-based or other methods) works effectively if all positions can be compared along a few key dimensions, such as:
- professional knowledge,
- degree of responsibility,
- complexity of problem-solving,
- impact on the organisation.
This enables the company to convincingly substantiate the logic according to which two positions belong to the same salary band – or what justifies a deviation.
Salary bands, total compensation and the “fair pay” system
Pay transparency examines the entire remuneration structure. Establishing or refining a banded salary structure is an important step, especially where the company has not previously operated with a unified salary architecture.
HR must establish clear rules regarding what justifies positioning within a band. Such factors may include:
- level of experience,
- specialised expertise,
- scarce competencies,
- extent of business responsibility,
- long-term performance.
Documented and consistently applied criteria directly reduce the risk that pay differences appear as unjustified discrimination.
Reporting, data analysis and system support
Fulfilling reporting obligations requires reliable, high-quality data. This demands unified HR and payroll master data, an organised job coding system and consistent, regulated data entry processes.
The pillars of a well-functioning pay transparency system:
- standard reports (average and median pay, salary band utilisation, distribution of benefit elements),
- automated statements supporting mandatory data provision,
- dashboards suitable for analysing time trends,
- cooperation between HR, finance and BI experts.
The objective is for pay transparency data to become real-time decision-support information for management.
Data protection, anonymisation and building trust
Payroll informatics is a sensitive and strictly regulated area. The company must precisely define:
- what data it processes,
- for what purpose,
- how long it stores the data,
- who may access individual-level data.
Where possible, aggregated and anonymised data should be used. HR’s task is transparent communication: employees feel secure when they understand data processing procedures and know what safeguards protect them.
Change management: how can the process be successfully implemented?
The introduction of pay transparency represents an organisational-level transformation. Successful implementation is supported by:
- regular status assessments,
- launching pilot projects,
- a scheduled implementation plan,
- leadership education and consistent communication,
- involving employees and addressing initial concerns.
For HR, this is an opportunity to strengthen the company’s credibility, promote a fair performance culture and, in the long term, reduce turnover and disputes.
What should be monitored in the upcoming period?
- Reporting obligations require a new data structure and system logic.
- Joint pay assessment is a complex HR project based on cross-functional cooperation.
- Job evaluation and salary architecture will form the foundation of a transparent compensation system.
- Data quality is a decisive factor in successful implementation.
- Supporting organisational culture is at least as important as legal compliance.
The next phase: depth of preparation
Pay transparency becomes a functional system when the organisation approaches changes not merely as a reaction, but as forward-looking development. Reporting obligations, joint pay assessment and strengthening job structures are all elements that, in the long term, lay the foundation for more stable, transparent and predictable operations. The next step is to examine how prepared the company is for these expectations, where the most critical gaps lie, and what developments can already be initiated today.
In the next part of the series, we will present how a Readiness Audit can be conducted: which HR areas should be addressed first, how pay transparency maturity can be measured, and what development sequence ensures the lowest risk and the greatest business advantage.
Our expert team provides support in conducting readiness audits, redesigning job structures and establishing salary frameworks. Contact us if you would like to plan your company’s pay transparency journey.
EU legal framework, Hungarian implementation and practical obstacles to introduction
The European Union’s Pay Transparency Directive 2023/970 introduces a new approach to enforcing the principle of “equal pay for equal work.” Although this fundamental principle has long been included in both domestic and EU regulation, in practice wage differences can still be identified where justification or detection poses difficulties. The current legislative step aims to establish a framework in which equal pay can be operated in a transparent manner based on objective criteria.
In Hungary, preparation for implementation has not yet begun at the level of detailed rules; however, Member States must transpose the provisions of the Directive into national law by 7 June 2026. This means that Hungarian employers will gradually face new compliance, HR process and data protection requirements in the coming years. Despite the uncertainty, it is advisable to prepare in time, particularly where the practical introduction of pay transparency will have an impact on business decisions and employee experience.
Which laws are expected to be amended?
The Hungarian transposition may affect several closely interconnected regulatory areas:
Labour Code (Mt.)
This may include the obligation to indicate salary ranges in job advertisements, the prohibition of questions regarding previous salary, and the objective determination of remuneration and promotion criteria. Employees’ right to information regarding pay may also expand.
Rules on equal treatment
A more precise definition of the concept of “work of equal value” is expected, as well as strengthening of the reversed burden of proof and expansion of the possibility of collective enforcement of claims.
GDPR and data protection issues
The processing of salary, performance and career data is a sensitive area. Detailed guidance from the Hungarian National Authority for Data Protection and Freedom of Information (NAIH) can be expected regarding which legal basis, level of anonymisation or data storage practice may be considered appropriate, particularly where the employer prepares gender-segregated pay reports or trend analyses.
Why is preparation complex at this stage?
HR and legal experts are working simultaneously at the intersection of three sets of expectations that are not yet finalised: the Labour Code, the GDPR and equal opportunities legislation each contain frameworks that require reinterpretation in light of pay transparency.
Three defining challenges appear to be emerging:
- The domestic detailed rules are not yet known. For example, the reporting frequency, headcount threshold, level of sanctions or method of supervisory inspections remain uncertain.
- Uncertainty in data protection interpretation. The regular analysis of salary data carries high risk from a data protection perspective. It is difficult to draw the line between lawful data processing and excessive data collection.
- Changing litigation risks. The numerical demonstration of pay differences and action plans linked to deviations exceeding 5% may create new types of disputes.
The current period is essentially a preparation phase: organisations are building the necessary processes, while the boundaries of obligations are not yet fully visible.
Labour Code – GDPR – equal opportunities: points of friction and expected directions
According to the new approach to pay transparency, salary data will in the future become one of the fundamental tools for enforcing equal treatment, rather than merely administrative data or a “business secret.” Employers must justify each salary offer based on the value of the position and the salary band policy.
- From a Labour Code perspective: The detailed, objective recording and communication of remuneration logic will become mandatory. The prohibition on asking about previous remuneration represents a significant change in recruitment practice.
- From a GDPR perspective: It must be ensured that the analysis of pay differences complies with the principles of data minimisation, purpose limitation and storage limitation – this will be particularly critical for analyses covering several years retrospectively.
- From an equal opportunities perspective: Due to the reversal of the burden of proof, the employer must demonstrate that identifiable differences are professionally justified.
Benchmarks, indicators and the professional role of HR
The effective functioning of pay transparency largely depends on whether the company is able to operate data-driven, consistent and transparent internal systems. Properly selected benchmarks help distinguish real risks from objective deviations.
Key professional focus areas:
- establishing salary bands based on objective job evaluation,
- structured collection of performance and career data,
- analysis of positioning within bands and relation to market median,
- preparing managers for future communication and legal expectations.
What should be highlighted for the upcoming period?
- The introduction of pay transparency represents a significant change in HR processes and organisational culture.
- Hungarian legislation will amend several areas simultaneously, resulting in complex implementation.
- Data protection requirements will play a decisive role in shaping pay reports and analyses.
- Due to the shift in the burden of proof, the justifiability of employer decisions will become particularly important.
- Preparation is also significant from a market competitiveness perspective, particularly in the areas of workforce retention and strengthening the employer brand.
Next steps of implementation
The application of pay transparency initiates a gradual change in mindset within organisations. Early preparation – establishing job evaluation systems, salary band policy and data-driven HR processes – already strengthens transparency and predictability in company operations. The next period will focus on how the expectations of the Directive can be translated into concrete HR practices: what data must be collected, what reports are required, and when joint pay assessment becomes mandatory.
In the next part of the series, we will present step by step the reporting obligations, the logic of joint pay assessment and the system-level changes necessary for establishing a salary architecture.
If you would like to prepare your organisation for pay transparency requirements, our expert team provides support from job evaluation through the establishment of salary bands to the development of reporting systems.
At the beginning of 2026, new regulations entered into force that significantly modify the tax treatment of corporate hospitality. Based on Government Decree No. 10/2026 (I.30.) on measures to improve the competitiveness of restaurants, certain representation benefits provided in the form of food and beverages consumed in restaurants and confectioneries have become tax-exempt up to a specific threshold.
This change is particularly relevant for businesses, as hospitality related to business meetings, maintaining partner relationships or professional events is a common part of corporate operations. At the same time, the application of the tax exemption is subject to strict conditions, and proper documentation plays a key role.
Below we provide an overview of the concept of representation, the main elements of the new regulation and the most important practical considerations.
What does “representation” mean under the Personal Income Tax Act?
The concept of representation is defined in the Hungarian Personal Income Tax Act (Act CXVII of 1995):
“Representation means hospitality (food and beverages) provided in connection with business, official, professional, diplomatic or religious events organised by the provider, as well as hospitality provided on the occasion of state or church holidays, together with services related to the event (such as travel, accommodation, leisure programmes etc.), provided that such benefits do not qualify as representation if, based on the documentation and circumstances of the benefit (organisation, advertising, itinerary, destination, place and duration of stay, proportion of professional or religious programme and leisure programme etc.), misuse of rights can be established even indirectly.”
Based on the above definition, hospitality provided in the framework of a business meeting (e.g. lunch or dinner) may qualify as representation.
By contrast, restaurant consumption provided during a purely recreational corporate team-building event does not qualify as representation, as it lacks a professional element.
Similarly, an event primarily aimed at hospitality or leisure activities does not qualify as representation.
The new regulation: tax-free restaurant and confectionery representation
The Government Decree No. 10/2026 (I.30.) on measures to improve the competitiveness of restaurants allows representation benefits provided in restaurants or confectioneries to be treated as tax-exempt under certain conditions.
The maximum amount of the tax exemption is:
- up to 1% of the company’s total annual revenue,
- but not exceeding HUF 100 million.
This rule may create more favourable conditions for corporate hospitality; however, it remains essential that the benefit qualifies as representation under the applicable legislation.
Proper documentation is essential
In the case of events organised for clients or business partners, it is particularly important that the documentation clearly supports the nature of the representation benefit.
In practice this means that:
- the professional purpose of the event should be identifiable,
- invoices and expenses should be clearly traceable,
- where necessary, an expense breakdown (e.g. in Excel) should be prepared indicating
- what was purchased,
- for what purpose,
- and in what amount.
Such documentation helps determine which expenses may be treated as tax-exempt representation within the statutory limits.
Which hospitality establishments fall under the decree?
A key condition for the tax exemption is that the hospitality must take place in a restaurant or confectionery defined by the decree.
According to Government Decree No. 10/2026 (I.30.):
Restaurant:
a hospitality establishment registered by the local commercial authority as a business type defined in Annex 4, point 1 of Government Decree No. 210/2009 (IX.29.).
Confectionery:
a hospitality establishment registered by the local commercial authority as a business type defined in Annex 4, point 3 of Government Decree No. 210/2009 (IX.29.).
Restaurant – main characteristics according to the regulation
According to Government Decree No. 210/2009 (IX.29.):
| Main product type | Hot meals |
| TEÁOR’25 code | 56.11 Restaurant services |
| Type of operation | Open year-round / seasonal |
| Service characteristics, equipment used, place of consumption | The service may be traditional or self-service, using reusable tableware (dinnerware, glasses, etc.). The establishment has a guest area and must provide the possibility of on-site consumption. |
| Kitchen characteristics, place of food preparation | Meals are prepared on site; the establishment has a cooking kitchen. |
Confectionery – main characteristics according to the regulation
| Main product type | Confectionery products, sweet goods |
| TEÁOR’25 code | 56.11 Restaurant services |
| Type of operation | Open year-round / seasonal |
| Service characteristics, equipment used, place of consumption | The service may be traditional or self-service, using disposable or reusable tableware (dinnerware, glasses, etc.). Providing the possibility of on-site consumption is not mandatory. |
| Kitchen characteristics, place of food preparation | Confectionery products are not necessarily prepared on site. |
Practical question: how can the establishment be identified on invoices?
In practice, it is often not clear from a receipt or invoice whether the consumption took place in a restaurant, confectionery or another hospitality establishment not covered by the decree.
As the tax exemption applies only to establishments defined by the regulation, it is advisable to clearly mark such invoices.
Therefore, we kindly ask to indicate on invoices:
“restaurant/confectionery – representation”
if the expense meets the above conditions and is intended to be treated as tax-exempt representation.
How Grant Thornton can help
The tax treatment of representation expenses often raises practical questions, particularly in relation to documentation, accounting and regulatory compliance.
Grant Thornton’s experts can assist with:
- the tax qualification of representation expenses,
- the development of internal policies,
- the review of documentation practices,
- and ensuring compliance with applicable legislation.
If you would like to review how the new rules can be applied safely within your organisation, please contact our experts.
We are happy to support the practical implementation and help minimise tax risks.