Business travel legislation in Hungary: Overview of responsibilities | Infographic

DURATION OF A BUSINESS TRAVEL

The duration of a business travel is determined by the number of calendar days a person spends on the trip, starting from the day and time of departure until the return of the means of transport to either the employee’s permanent residency or workplace. The calculation varies based on whether the trip is within Hungary or abroad. In the first case, a calendar day is counted when the trip exceeds 6 hours. For business travel abroad, a calendar day is considered to be 24 hours. Any additional hours beyond 24, after a longer foreign trip, are counted as extra day if they exceed 8 hours.

Private VEHICLE FOR BUSINESS TRAVEL

Expenses related to vehicles used exclusively for business purposes are fully reimbursable, but the company must maintain a logbook of the kilometres driven to probe the car’s business usage. Before each trip, the employee records the initial kilometres displayed on the car’s dashboard. At the end of the trip, the final kilometres are recorded to calculate the total kilometres driven during the journey.The employee is eligible for reimbursement of kilometres travelled (amortization) if they own a car or if it belongs to a direct relative. Additionally, the employee can claim reimbursement for fuel expenses. The fuel cost can be determined by subtracting the approximate number of litres consumed during the trip, using the average fuel consumption defined by legislation for the specific vehicle and fuel type.The fuel price for the calculation should not exceed the market price published by the tax authority. Alternatively, a legally determined average price for different types of fuel may be used. If the employee provides a fuel purchase document from abroad in a foreign currency, the price is converted to the National Bank of Hungary exchange rate on the date of receipt of the fuel or the rate from the 15th day of the previous month.

MEAL ALLOWANCE FOR DOMESTIC BUSINESS TRAVEL IN HUNGARY

Employees on domestic business travels are entitled to daily per diems covering food and other minor expenses. The daily allowance is gross HUF 500. Employers can choose to pay a flat-rate daily allowance, which is taxable as wages, or reimburse based on actual invoice costs. Both methods can be applied, and there are no limits on the contribution amount.When reimbursing an invoice for meals issued in the employer’s name to an employee, the reimbursed amount is subject to specific defined benefits tax (the amount provided for meals multiplied by 1.18), with only 15% personal income tax and 13% social contribution tax payable by the employer.

MEAL ALLOWANCE FOR BUSINESS TRAVEL ABROAD

The specific foreign per diem amounts for each country are not defined by legislation. Instead, the employer determines the allowance, but only 30% of the meal allowance value is non-taxable, capped at a maximum of EUR 15 per day.When traveling by plane or ship, it is essential to factor in an additional one hour before departure from Hungary and after arrival in Hungary. For all other cases, the starting point for considering a trip abroad is the moment of crossing the border.For external trips, a daily allowance is not granted for periods less than 8 hours. However, if the trip exceeds 8 hours, the full value of the daily allowance is granted.The employer can choose between two methods for converting foreign allowances: using the exchange rate of the National Bank of Hungary valid up to the 15th day of the previous month when the settlement is paid to the employee and using the average exchange rate of the National Bank of Hungary valid up to the day preceding the day when the settlement is paid to the employee.In the past, the first option was recommended, but currently, either method is acceptable and complies with tax rules.

TRAVEL REIMBURSEMENTS

Employers are obligated to compensate employees for expenses directly related to work activities. This includes reimbursement of documented travel expenses (e.g., travel ticket, plane ticket, taxi, public transport ticket) and coverage of incidental expenses (e.g., telephone fee, fax fee, internet fee, parking fee, highway fee, tunnel fee).

ADVANCES FOR BUSINESS TRAVEL COMPENSATION

To pay advances in Hungarian currency, the employee’s consent is required. If the employee provides consent, they will receive the equivalent of the advance payment in foreign currency, calculated based on the average exchange rate established by the National Bank of Hungary on the day of the advance payment or the exchange rate valid up to the 15th day of the previous month of the employee’s pay.