An Advance Pricing Agreement (APA) is an agreement between a taxpayer and a tax administrator that aims to avoid any transfer pricing disputes, by determining the arm’s length price for a controlled transaction.

Our infographic on advance pricing agreements is a sum-up of characteristics of APA in Czech Republic, Hungary, Poland, Romania and Slovakia.


Availability and validity

CZECH REPUBLIC

Maximum initial duration
3 years

%

No possibility of extension, but after three years, the application can be submitted again

HUNGARY

Maximum initial duration
5 years

%
Maximum extended duration
8 years

%

(Possibility to extend by max. 3 years if conditions remain unchanged)

POLAND

Maximum initial duration
5 years

%
Maximum extended duration
10 years

%

(Possibility to extend by max. 5 years if conditions remain unchanged)

ROMANIA

Maximum initial duration
5 years

%

Extension is possible in case of long term contracts; the legislation does not provide an effective maximum period

SLOVAKIA

Maximum initial duration
5 years

%
Maximum extended duration
10 years

%

(Possibility to extend by max. 5 years if conditions remain unchanged)


CASE STUDY: TRANSFER PRICING SERVICES AND CONSULTANCY FOR A MULTINATIONAL COMPANY

A large multinational developer company was requiring complete consultancy in the field of transfer pricing in several countries they operate in. We provided the full scope of the service, from start to end. 


Fees for APA

CZECH REPUBLIC

Administrative fee – CZK 10,000 (approx. EUR 390)

The amount of the fee depends on the number of transactions assessed, or on the number of permanent establishments; regardless of whether it is a unilateral, bilateral or multilateral APA.


HUNGARY

Depending on the number of jurisdictions taking part in the APA, filing fees vary as follows:

Unilateral APA – HUF 8,000,000 (approx. EUR 21,000)

Bilateral APA – HUF 12,000,000 (approx. EUR 31,000)

Multilateral APA – HUF 12,000,000 (approx. EUR 31,000)

Act CL of 2017 on the Rules of Taxation effective from 1 February 2024: (1) The fee for the procedure to establish the arm’s length price shall be HUF 8 million in unilateral proceedings and HUF 12 million in bilateral or multilateral proceedings. Payment of the fee in instalments or deferred payment shall not be permitted.

In the case of proceedings for APA extension or modification, the fee is 50 percent of the fee paid in the original procedure. If the APA request is rejected or withdrawn, the HTA returns 85 percent of the fee already paid pertaining to the APA procedure. The pre-filing consultation is subject to an administrative fee. The fee for a pre-filing consultation is HUF500,000 (approx. USD1,780) per each consultation.


POLAND

1% of the value of the transaction that is the object of the agreement. However, in the case of:

Unilateral APA:

  • concerning domestic entities – min. PLN 5,000 (approx. EUR 1,200) and max. PLN 50,000 (approx. EUR 11,800)
  • concerning foreign entity – min. PLN 20,000 (approx. EUR 4,700) and max. PLN 100,000 (approx. EUR 23,500)

Bilateral or multilateral APA – min. PLN 50,000 (approx. EUR 11,800) and max. 200,000 PLN (approx. EUR 47,000)

Renewal fees are half of the amount of the fee for the renewed APA.


ROMANIA

For large taxpayers and other taxpayers with consolidated value of transactions higher than EUR 4,000,000:

  • EUR 20,000 for the initial APA
  • EUR 15,000 for amending the initial APA

For other taxpayers and consolidated value of transactions lower than EUR 4,000,000:

  • EUR 10,000 for the initial APA
  • EUR 6,000 for amending the initial APA

SLOVAKIA

Unilateral APA – EUR 10,000*

Bilateral and multilateral APA – EUR 30,000

*half amount applies to the taxpayer with the index of tax reliability „high


Common aspects

Application responsibility: The tax administrator issues the APA on the basis of an application filed by the taxpayer. In other words, the tax administrator cannot issue the APA “ex officio”.
Language options: The application for the APA, to which the TPD shall be enclosed, too, must be filed in local language only*.

*except Hungary (where English, French, and German languages are also accepted) and Slovakia (where TPD might be accepted also in other language , however the tax authority might additionally request for the TPD submission also in Slovak language)

Compliance in the fiscal areas is crucial for any company who wishes to operate a successful business. However, local tax systems may be difficult to follow due to their complexity, mainly in case of a multi-country presence of a corporation. Different obligations and deadlines on direct or indirect taxes, regulatory matters or tax authority enquiries round up to a sensitive agenda in need of expert approach.

Our local tax departments prepared a comprehensive guideline on local taxes form the Czech Republic, Hungary, Poland, Romania and Slovakia, to help you better understand the local specifications and gain an insight into statutory obligations. The eBooks available for download go into detail, among others, on matters related to corporate income tax, withholding tax, transfer pricing, personal income tax, property tax, motor vehicle tax, value-added tax and taxes on capital.

CZECH REPUBLIC

HUNGARY

POLAND

ROMANIA

SLOVAKIA

UKRAINE

The economic stability of Central and Eastern Europe provides a solid ground for businesses to get into motion. The growth of most companies actively relies on the import or export of goods and services, but these actions call for an internal mechanism that ensures neutrality and a system that works in the interests of member states in all aspects of cross-border operations.

The current value-added tax system of the EU was built on this need and presently, member states are subject to regulations that, among others, avoid double taxation and require the taxes paid only on the value that is added at each stage of production and distribution.

To provide you with practical information on the matter, our experts prepared an interesting overview of the local VAT regulations from the Czech Republic, Hungary, Poland, Romania and Slovakia.

CZECH REPUBLIC

HUNGARY

POLAND

ROMANIA

SLOVAKIA

Keeping up to date with the latest legislation in the field of taxes may be difficult, not to mention the ever-changing deadlines and obligations. To make it all a lot easier, our tax experts prepared an easy-to-follow, comprehensive calendar for 2024, including all the necessary dates and duties you should respect in order to avoid penalties and sanctions. Download our free calendars to have everything tax-related at a hand’s reach from the Czech Republic, Hungary, Poland, Romania and Slovakia.

CZECH REPUBLIC

HUNGARY

POLAND

ROMANIA

SLOVAKIA

UKRAINE

Most companies consider the future to lay in expansion and globalization, but the establishment, development and maintenance of a business on an international level requires a lot of attention, time and effort due to differences in local regulations and the ever-changing legislative frameworks. Our immense network of local experts and advisors from the region can help you with company formation in Europe and full compliance regarding local and global requirements in all jurisdictions, but also with choosing the proper form of business.

Besides the most common forms of businesses, such as the limited liability company or joint stock, there is a broad variety to choose from, so it is crucial to be aware of the benefits and drawbacks related to them. Our free guidelines on company formation in the Czech Republic, Hungary, Poland, Romania and Slovakia provide the necessary insight into the legal forms of businesses, the minimum capital and contribution needed, requirements on minimum documentation, shareholders, the process of registration, including a general overview of corporate taxes, duties, fees, penalties, investment incentives and other related aspects.

CZECH REPUBLIC

HUNGARY

POLAND

ROMANIA

SLOVAKIA

UKRAINE

UNITED KINGDOM

Labour law and employment is an integral part of every company, but on top of that, the complexity of HR administration has grown significantly in recent times. With the increase of expansions and global mobility, enabled by liberated markets, local legislation and the difference between country regulations gain even more importance. To tackle all compliance issues and gain proper navigation in labour-law processes, a comprehensive support is a must, mainly for companies who operate in multiple countries. We provide not only consultancy concerning employment-related matters or GDPR but also offer the design and implementation of tailored internal processes, policies, procedures, standards and documentation related to client-specific employment relationship.

The latest labour law guidelines with legislation applicable for 2024 provide a broad overview of the topic and our expert know-how on labour law and employment from the Czech Republic, Hungary, Poland, Romania and Slovakia. The free eBooks elaborate on basic rules such as the entitlement to work for residents and non-residents, employment contracts, probationary period, conditions for the termination of employment, social contributions and income tax, working time, annual paid leave, unpaid leave, employee benefits, temporary work characteristics and an overview of applicable legislation.

CZECH REPUBLIC

HUNGARY

POLAND

ROMANIA

SLOVAKIA

UKRAINE

Over the past years we have developed specialized international teams of consultants to provide full-range services related to transfer pricing. We have vast experience with hundreds of companies of various size, coming from many different sectors and countries.

Our experts help you to effectively address all aspects related to transfer pricing policy in your company and make sure you meet the documentation regulatory requirements. From initial review of transactions and examination of policies, through design of the most suitable transfer pricing strategy, to management of required documentation and dealing with statutory authorities, we are ready to cover full support you might need when dealing with such a complex matter as transfer pricing.

Check our comprehensive overviews on transfer pricing in Europe – more precisely, the local regulatory frameworks in the Czech Republic, Hungary, Poland, Romania and Slovakia. In our free eBooks, which are available for download, you can read more about the arm’s length principle, the documentation including its types, general rules and deadlines, methods of transfer pricing documentation, advance pricing agreements and penalties.

CZECH REPUBLIC

HUNGARY

POLAND

ROMANIA

SLOVAKIA

The gross monthly salary under permanent employment is subject to multiple taxes and contributions paid by the employer and the employee. Therefore, its important to calculate the net income in order to get a good understanding of earned wages after taxes, taking into consideration also some possible tax bonuses for children or non-taxable parts of the tax base. Our experts prepared salary calculators for Europe, to help you calculate the net income in the Czech Republic, Hungary, Poland, Romania, Slovakia and Ukraine, and to provide a quick indicative reference of gross and net earnings.

CZECH REPUBLIC

HUNGARY

POLAND

ROMANIA

SLOVAKIA

UKRAINE

Legally recognised corporations in Europe take on many forms. We decided to shed some light on useful legislation insights, general incorporation requirements and characteristics of a LLC or Limited Liability Company in Europe.

Moreover, we decided to compare the legal aspects of LLCs in the Czech Republic, Hungary, Poland, Romania, Slovakia and Ukraine to provide a comprehensive yet clear overview of the requirements in the region.

Dive into the general features of LLCs, such as the basic characteristics of founders, minimum capital nature and limits, types of contributions and payment deadlines, guarantees required by shareholders, incorporation time, obligation of VAT registration, and much more.

Download the free PDF version of the comparison of LLCs in Europe, or find some selected data below

General features of a limited liability company in Europe

Founders

CZECH REPUBLIC

Natural persons or legal entities

No. of founders: Unlimited

HUNGARY

Natural persons or legal entities

No. of founders: Unlimited

POLAND

Natural persons or legal entities

No. of founders: Unlimited

 

ROMANIA

Natural persons or legal entities

No. of founders: up to 50

SLOVAKIA

Natural persons or legal entities

No. of founders: up to 50

UKRAINE

Natural persons or legal entities

No. of founders: Unlimited


Minimum capital and contribution

CZECH REPUBLIC

Minimum capital: CZK 1

Minimum contribution: CZK 1

Type of contribution: Monetary / non-monetary

HUNGARY

Minimum capital: HUF 3,000,000

Minimum contribution: HUF 100,000

Type of contribution: Monetary / non-monetary

 

POLAND

Minimum capital: PLN 5,000

Minimum contribution: PLN 5,000

Type of contribution: Monetary / non-monetary

ROMANIA

Minimum capital: RON 1

Minimum contribution: RON 1

Type of contribution: Monetary / non-monetary 

 

SLOVAKIA

Minimum capital: EUR 5,000

Minimum contribution: EUR 750

Type of contribution: Monetary / non-monetary

UKRAINE

Minimum capital: Not specified

Minimum contribution: Not specified

Type of contribution: Monetary / non-monetary

 


Registration procedure duration

CZECH REPUBLIC
1 – 2 weeks

%
ROMANIA
3 working days

%
HUNGARY
1-15 working days

%
SLOVAKIA
10 – 15 working days

%
POLAND
1-2 days online*

%

*2 – 4 weeks at the notary

UKRAINE
24 hours*

%

*after submitting documents to a state register


Court fee

CZECH REPUBLIC

CZK 6,000

HUNGARY

No fee for the court procedure

POLAND

PLN 600

(PLN 350 in case of registration via S24 platform)

ROMANIA

From February 2017, the Trade Register fees for incorporation have been removed, only Official Gazette publication fees are applicable

SLOVAKIA

EUR 150

UKRAINE

No state fee for registration

A flexible labour legislation is essential for promoting the creation of new businesses, the growth of established firms and the creation of career opportunities. European countries have distinctive employment law frameworks, yet still remain competitive for investors.

Our infographic on employing in Europe and its labour law sums up and compares working aspects in European countries such as: the Czech Republic, Hungary, Poland, Romania, Slovakia and the United Kingdom.


Employing in Europe on fixed-term employment contracts

According to local legislation, there are two types of employment contracts: fixed-term and indefinite. In the case of fixed-term contracts, the law stipulates several conditions and restrictions.

Fixed-term contract duration

Czech Republic
3 years

%
Hungary
5 years**

%
Poland
2 years and 9 months***

%
Romania
3 years

%
Slovakia
2 years

%

The United Kingdom has no minimum or maximum duration for fixed-term employment contracts****

Renewal possibilities*

Czech Republic
2 times

%
Hungary
not specified**

%
Poland
2 times

%
Romania
2 times****

%
Slovakia
2 times****

%
United Kingdom
not specified*****

%

* A contract concluded after the maximum times of renewal will be automatically a contract for an indefinite period.
** Hungary: The duration of a fixed-term employment relationship may not exceed five years, including the duration of an extended relationship and that of another fixed-term employment relationship concluded within six months of the termination of the previous fixed-term employment relationship.  A fixed-term employment relationship may be extended, or another fixed-term employment relationship may be concluded within six months from the time of termination of the previous one upon the employer’s legitimate interests. If the fixed-term employment relationship is extended or another fixed-term employment relationship is established within six months from the time of termination of the previous one and employment is provided in the same or similar position, no probationary period may be stipulated.
*** Poland: 2 years and 9 months pertains to the total duration of subsequent contracts.
**** Romania: A maximum of three successive fixed-term employment contracts may be concluded between the same parties. Successive contracts are those concluded within 3 months of the end of the fixed-term contract and may not last for more than 12 months each. As a result, the legal maximum duration of fixed-term contracts concluded between the same parties can be 60 months. This is the total of the duration of the first contract of 36 months plus 12 months for each of the two successive contracts.
***** United Kingdom: After 4 or more years on a fixed-term contract, the employee becomes a permanent employee, unless the employer has a valid business reason not to do so.


Trial period

During the trial period, both parties can terminate the employment relationship without restrictions.

Execution position

Czech republic*
3 months

%
Hungary**
3 months

%
Poland***
3 months

%
Romania****
3 months

%
Slovakia
3 months

%
United Kingdom*****
6 months

%

Management position

Czech republic*
6 months

%
Hungary**
3 months

%
Poland***
3 months

%
Romania****
4 months

%
Slovakia
6 months

%
United Kingdom*****
6 months

%

* Czech Republic: A probationary period may not be longer than one half of the agreed duration of the employment relationship and must be agreed in writing on the day of work commencement at the latest. During the probation period, the employer may not terminate an employment relationship within the first 14 calendar days of an employee’s temporary incapacity for work (quarantine).
** Hungary: The parties may stipulate in the employment contract a probationary period up to 3 months from the beginning of the employment relationship. If a shorter probationary period is stipulated, the parties may extend the probationary period – only once. The probationary period, even if extended, shall not exceed three months.
*** Poland: In Poland, it is concluded as a special employment contract for the trial period, which is concluded for a period not exceeding 3 months. With the reservation that it is concluded for 1 month – in the case of the intention to conclude an employment contract for a fixed period of fewer than 6 months,  and for 2 months – in the case of the intention to conclude an employment contract for a definite period of at least 6 months and less than 12 months. The parties may agree that the contract is extended by the time of leave, as well as by the time of other justified absence of the employee.
**** Romania: Trial/probationary periods for short-term contracts may be agreed upon separately, based on contract length, as defined by law. There are also exceptions: the probation period is established depending on the category of employee, type of employment contract etc. For example, disabled employees have at least 45 working days; fixed-term contracts have a different probation period depending on duration etc.
***** United Kingdom: The duration of the probation period is at the company’s discretion, but usually lasts 3-6 months.


Working time

Standard employment contracts*

Czech Republic

Working time: 40h/week

Overtime: 150h/year**

Hungary

Working time: 40h/week

Overtime: 250h/year***

Poland

Working time: 40h/week

Overtime: 150h/year****

Romania

Working time: 40h/week

Overtime: 8h/week*****

Slovakia

Working time: 40h/week

Overtime: 150h/year******

United Kingdom

Working time: 35-40 hours/week

Overtime: Uncapped (would be at company discretion)

* The exact conditions under which overtime can be performed, as well as the exact periods (per week, month or year) are specified in detail in all local legislation.
** Czech Republic: Overtime can be increased up to 416 hours/year if agreed with the employee.
*** Hungary: Overtime can be increased up to 400 hours/year.
**** Poland: Overtime can be increased to 416 hours/year.
***** Romania: The rule is that the legal maximum working time cannot exceed 48 hours/week, including overtime. By exception, however, working time may be extended beyond 48 hours/week, provided that the average working hours, calculated over a reference period of 4 calendar months, do not exceed 48 hours per week, and that for certain sectors of activity, units or professions laid down in the applicable collective agreement, reference periods longer than 4 months but not exceeding 6 months may be negotiated.
****** Slovakia: Overtime can be increased up to 400 hours/year (employee consent needed).


Annual leave

Entitlement to annual leave or vacation is determined according to the time worked.

Vacation right

(”working” days/year)

Czech Republic: 20 days*

Hungary: 20 days

Poland: 20 – 26 days**

Romania: 20 days

Slovakia: 20 days****

United Kingdom: min. 20 days plus 8 bank holidays

Additional leave  

(”working” days/year)

Czech Republic: approx.* 5 days (special employment conditions)

Hungary: up to 7 days depending on the number of children; up to 10 days depending on age

Poland: up to 9 days (5 days of care leave, 2 days of child care, 2 days off work due to force majeure)

Romania: minimum*** 3 days

Slovakia: aliquot of 365 days for employees who permanently take care of a child

United Kingdom: at company discretion*****

* Czech Republic: Employees are entitled to 4 weeks of vacation in a calendar year. The law defines the entitlement to additional leave for certain demanding professions (in the length of the specified weekly working hours).
** Poland: 20 days – if an employee has been employed for less than 10 years, or 26 days if an employee has been employed for at least 10 years; 5 days/year/care for a family member for medical reasons, 2 days/year/care for a child,  2 days/year/force majeure
*** Romania: The law defines the entitlement to additional leave for certain categories of employees (e.g. employees working in difficult/harmful conditions, disabled employees, young people under the age of 18 etc.).
**** Slovakia: 25 working days for employees who are 33 years old or older, or employees who are permanently taking care of a child.
***** United Kingdom: If entitled Statutory Maternity Pay (SMP) is paid for up to 39 weeks by the UK government, along with Statutory Sick Pay (SSP) for up to 28 weeks.


Notice period

Termination without giving a reason by the employee is defined by local regulations. However, the length of the notice period depends on the circumstances of the termination of the contract.

Czech Republic
60* calendar days (approx.)

%
Hungary
30- 90** calendar days (approx.)

%
Poland
14- 90*** calendar days (approx.)

%
Romania
20- 45**** working days

%
Slovakia
30- 90***** calendar days (approx.)

%
United Kingdom
30- 90****** calendar days (approx.)

%

* Czech Republic: The standard notice period is 2 months.
** Hungary: Standard 30 days. Where employment is terminated by the employer, the thirty-day notice period shall be extended by 5-60 days, based on the total previous employment period.
*** Poland: Agreements concluded for definite and indefinite periods: 2 weeks for termination after less than 6 months of activity, 1 month after at least 6 months, 3 months after 3 years; Probation period is not included in the calculation of notice period.
– Probation period: 3 working days if the probation period does not exceed 2 weeks; 1 week if the probation period is longer than 2 weeks; 2 weeks if the probation period is 3 months.
**** Romania: Max. 20 working days for an executive position, max. 45 working days for a management position.
***** Slovakia: 1 month for termination after < 1 year of employment, 2 months for others; in case of termination due to dissolution of the employer, redundancy or health condition of the employee the NP is 2 months for employees with 1 – 5 years, 3 months for > 5 years of employment.
****** United Kingdom: At company discretion – normally 1-3 months depending on how long an employee has been in employment

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