As of 1 February 2026, a favorable change took effect in the taxation of restaurant services in Hungary: the rate of the tourism development contribution payable on restaurant services was reduced from the previous 4 percent to 2 percent. The new, reduced rate should first be applied in tax returns for the tax return that covers 1 February 2026. The tax reduction qualifies as a de minimis aid under European Union rules.
The regulation of service charges (tips) has also become more flexible, allowing restaurants to classify up to 20 percent of their monthly gross revenue from guests’ food and beverage consumption (including VAT) as a service charge. This should improve the sector’s liquidity and provide temporary relief for businesses: the service charge may be distributed among employees and, unlike wages, it is not subject to social contribution tax or personal income tax; only a 18.5% social security contribution should be deducted from the payment. The service charge income may not replace the required minimum wage or guaranteed minimum wage payments, and the preferential tax treatment may only be applied to the remuneration exceeding these minimum amounts. One of the greatest advantages of the new measure is that the preferential tax treatment may be applied even if the service charge is not shown as a separate item on the invoice or receipt, thereby simplifying administration and broadening the scope of its use. However, it is important that the amounts shown on the receipts and those that are beneficially taxed under the new rule may not exceed the 20 percent threshold together, and the general rules applicable to service charge payments must be observed when making such payments.
Business entertainment expenses related to consumption in restaurants and confectioneries became tax-exempt under a certain threshold. Businesses may account for such expenses tax-free up to 1% of their revenues, but not exceeding HUF 100 million per year. This type of business entertainment costs is exempt from personal income tax and social contribution tax, thereby encouraging corporate use of restaurant services. Companies may already take advantage of this exemption from 1 January 2026 if their fiscal year corresponds to the calendar year. The compliance rules relating to tax return filings and tax payments have also changed accordingly.
It is important to note that the tax exemption only applies to hospitality provided in the context of business entertainment, i.e. in the course of business, official and professional events, or in the context of state or religious holidays. For example, restaurant consumption at corporate Christmas events is considered business entertainment; however, restaurant consumption provided during a corporate team-building event remains taxable if it does not have an official, professional purpose.
Company dinners provided in the company office cannot be tax-exempt either. The tax exemption only applies to hospitality in restaurants or confectioneries that are registered as such, where the food is prepared on-site. Consumption in buffets, cafés, bars or pubs is not tax exempt.
We therefore recommend registering in the analytical records and on the restaurant bills whether the hospitality was provided for business entertainment purposes, in which type of location it was provided (restaurant, cafe etc.) and to also keep any other documents proving the business nature of the event.
For incoming invoices that include tax‑exempt representation expenses, we kindly ask our clients to clearly indicate the tax‑exempt status (e.g., “tax‑exempt”). Without an explicit statement from our clients, we are unable to treat such invoices as tax‑exempt, as the conditions for tax exemption (type of the location, business nature of the event) must be verified on an invoice‑by‑invoice basis and according to the actual circumstances.