Restaurant entertainment expenses will be tax-exempt from 2026 – important tax changes for businesses

Dear Clients,

As of February 1, 2026, an important change has taken effect in the taxation of representation costs: restaurant hospitality (food and beverages) provided as representation is now tax‑exempt, and this rule applies to the entire tax year of 2026. The purpose of the amendment is to support the hospitality sector, while at the same time offering businesses a genuine opportunity for cost savings. In parallel, the rate of the tourism development contribution applicable to the sector has also been reduced.

The tax‑free benefit is limited to 1% of the company’s annual total revenue, up to a maximum of 100 million HUF. It is therefore advisable to plan annual spending in a way that allows the business to take full advantage of this new opportunity, especially given the special administrative requirements that may arise if the threshold is exceeded.

It is important to emphasise that the exemption applies exclusively to consumption in a restaurant. According to the legislation, only venues classified as restaurants fall under the rule; this does not include a buffet, pastry shop, café, bar, pub, or any event without genuine business or professional content, such as an informal team‑building dinner.

Proper administration remains essential. We recommend recording the business or professional purpose of the event, the participants, and the classification of the venue in order to ensure that the nature of the representation can be easily demonstrated in the event of an audit. An invoice alone is not sufficient to justify the exemption, so it is advisable to attach a short internal documentation to each such expense. Further official guidance is expected, but it is not yet available.

If you would require assistance in developing the practical process for administering representation expenses, or in reviewing how to manage these items simply and safely in your accounting system, we are happy to support you.