The Debrief: January 2026

This House – Implemented Legislation

Poland’s Labor Law Wave

Wolf Theiss Associate Marta Wasil reports that the past few months have been a period of intensive changes in Polish labor law. First, she says, “the new provisions on collective agreements came into force on December 13, 2025, introducing an electronic system for submitting notifications and modifying the rules governing the registration of collective bargaining agreements. They also provide greater flexibility in their content, including the ability to regulate matters not regulated by law, and extend their scope to individuals working under civil law contracts.”

At the same time, “as of December 24, 2025, employers became subject to new obligations due to the partial implementation of Directive (EU) 2023/970 on pay transparency and equal pay,” Wasil notes, adding that “job candidates must be informed about remuneration offered for the position, including all components and benefits, either as a specific amount or a range, based on objective and gender-neutral criteria.” Additionally, Wasil points to the change to the deadline for payment of cash equivalent for unused annual leave: “according to the act of December 4, 2025, the rules governing the payment of cash compensation for unused leave have been modified.”

Wasil also highlights that as of January 27, 2026, “certain actions under labor law will no longer be required exclusively in written form and may be carried out either in paper or electronic form,” including “information on employee monitoring, transfers of undertakings, consultations with trade unions on termination of employment, work schedules, working time arrangements, notifications to labor inspectors, unpaid leave applications, etc.”

Finally, Wasil notes that there were changes in the calculation of the length of service, with “periods counted toward length of service now include, among others, non-agricultural business activity, mandate and agency contracts, cooperation periods, childcare-related suspensions of activity, and certain periods of work abroad.” The minimum wage has also been increased – as of January 1, 2026, the new minimum monthly wage is PLN 4,806 gross, and the minimum hourly rate for certain civil law contracts is PLN 31.40 gross.

Czech Social Security Overhaul

“On January 1, 2026, new rules on unemployment benefits and requalification allowances came into effect in the Czech Republic,” Peterka & Partners Partner Adela Krbcova notes. “In both cases, the maximum amount is unified to 80% of the average wage in the national economy for the first three quarters of the preceding calendar year.”

“The length of time that benefits are granted depends on the age of the unemployed person: five months (for those up to 52 years of age), eight months (for those between 52 and 57 years), and eleven months (for those older than 55 years),” Krbcova adds. “During the first part of the period of unemployment, the unemployed person will receive 80% of their previous income; during the second part, 50%; and during the remaining period, 40%. The most advantageous regime applies to people over 52 years of age, who will receive 80%, 50%, and 40% of their previous income during the first three months, the next three months, and the remaining period, respectively. Those who left their jobs voluntarily or based on an agreement without a serious reason will no longer be penalized by having their benefits decreased.”

“The requalification allowance is increased to 80% of the previous income and is also paid for days spent attending chosen requalification programs arranged independently by the candidate,” Krbcova highlights. “The new rules reflect changes in notice periods brought by the Flexi Amendment (i.e., quicker termination) and are intended to stimulate the labor market by motivating people to change jobs and ease their return to work.”

This House – Reached an Accord

Bulgaria Proposes R&D Tax Boost

According to Schoenherr Bulgaria Head of Healthcare and Life Sciences Elena Todorova, Bulgaria’s new R&D tax incentive proposal is now moving to Parliament for consideration. “Under the proposal voted by the government on January 9, taxpayers conducting R&D may deduct an additional 25% of their R&D expenses. This means if R&D results in a long-term intangible asset, such as software, patents, or other IP, the historical cost of that asset can be increased by a further 25% for tax purposes.”

For HCLS innovators, “the timing and the proposal are significant,” Todorova notes. “Bulgaria has historically lacked a dedicated R&D tax incentive. The newly proposed deduction directly lowers the after-tax cost of early‑stage science, supporting translational research, clinical validation, and digital health solutions – areas where tax policy is shown to catalyze investments.” She adds that “the incentive also complements Bulgaria’s broader innovation strategy, including the EU‑backed 2021-2027 Program for Research, Innovation and Digitalization, which mobilizes over BGN 2.1 billion and prioritizes ecosystems and data‑driven transformation relevant to HCLS. Notably, ‘Industries for Healthy Life, Bioeconomy and Biotechnology’ remains a strategic smart‑specialization priority, aligning fiscal support with sectoral restructuring and development we are witnessing.” If enacted, Todorova argues, “the measure should enhance Bulgaria’s clinical and manufacturing appeal, help anchor high‑skilled high-paid jobs and integrate the local HCLS innovators into the EU value chains while improving business predictability for multi‑year R&D portfolios.”

Poland Aims To Unblock Grid Access

Poland now has a government-approved amendment before Parliament meant to unblock grid capacity, according to Greenberg Traurig Associate Przemyslaw Bugnacki. “The reform responds to a well-known market problem: connection capacity has been tied up by a vast number of projects that never progressed beyond the paper stage,” Bugnacki explains. “With issued connection conditions far exceeding any realistic build-out, viable renewable projects have increasingly struggled to secure access to the grid. The UC84 amendment is designed to break this deadlock.”

At its core, “the proposal reshapes the connection process by raising entry requirements,” Bugnacki explains. “Higher advance payments, new financial securities, application fees, and binding development milestones are intended to release capacity blocked by inactive projects and restore discipline to the pipeline.”

“What has triggered the strongest reaction among market participants is the scope of the reform,” Bugnacki reports. “Many market participants point out that this approach impacts projects launched under a different regulatory framework, raising questions around regulatory certainty and projects in progress. Critics, particularly among small and mid-sized developers, also argue that higher financial thresholds may, in practice, favor players with stronger balance sheets. Supporters, including system operators, see the reform as a necessary step to unlock capacity for real investments.”

Bugnacki notes that as parliamentary work begins, investors are actively reviewing their portfolios. “New milestones and transitional deadlines will matter, and missed steps may result in the loss of connection conditions or even the automatic expiry of connection agreements,” he emphasizes. “With the government signaling the need for swift parliamentary processing, the market expects UC84 to move quickly through the legislative stage, although the final timeline remains uncertain.”

Montenegro’s Real Estate Laws Shake Up

In Montenegro, Komnenic & Partners Managing Partner Milos Komnenic stresses that the real estate market has been affected by an unusually broad legislative overhaul. “On December 31, the parliament adopted amendments to approximately 40-50 laws in a single session, introducing significant changes across a range of areas, including tax treatment and administrative procedures,” Komnenic notes. “While the overall scope of amendments was extensive, two developments that are currently most relevant for real estate were previously announced and, as we have anticipated in our brief on upcoming VAT and regulatory changes affecting the real estate market from November 2025, are still expected to be adopted.”

A key development, according to Komnenic, concerns the Legalization Law. “It has been announced that the deadline originally set for February 14 will be extended by an additional six months,” he says. “This is particularly relevant because a law adopted in the summer of 2025 introduced strict limitations on the sale or transfer of real estate lacking a construction or use permit, subject only to limited exceptions. Such properties cannot be transferred until legalized. Given the large number of existing buildings without the required permits, the extension effectively prolongs the registration and legalization period, with a substantial impact on market activity.”

“Further pressure comes from the upcoming amendments to the VAT regulations,” Komnenic adds. “These changes remove the incentive that excluded land value from the VAT base for newly constructed projects, affecting several ongoing and pending developments, especially in the residential sector. This reform will likely result in increased tax costs for developers and may translate into higher end-prices, delays in structuring transactions, and increased renegotiation risk in active projects.”

Overall, “these developments have increased uncertainty for the real estate market,” Komnenic notes, “and will most likely continue to do so, with the impact currently perceived as largely negative, particularly due to reduced transaction flexibility, increased tax burden for new projects, and slower market activity during the extended legalization period.”

This House – The Latest Draft

Ukraine Drafts Broader Anti-Corruption Powers

LCF Law Group Head of Anti-Corruption & Compliance Anastasiia Didenko highlights a draft law aimed at expanding anti-corruption jurisdiction to bodies under the President. “In December 2025 and January 2026, Ukraine introduced new enforcement and legislative measures to strengthen anti-corruption practices, clarify investigative powers, and raise compliance standards across both public and private sectors,” she says. “On the legislative track, the Verkhovna Rada adopted the Law on Academic Integrity (No. 10392) on December 18, 2025, introducing a unified framework of principles, values, and liability for breaches in education and research. Furthermore, Draft law No. 14269 was registered, aiming to expand NABU’s jurisdiction over corruption involving heads of bodies established under the President and to close procedural gaps in the Criminal Procedure Code.”

The Verdict

Ukrainian Court Rules on Illicit Assets

Didenko also points to using stronger enforcement tools to hold public officials accountable as a part of Ukraine’s fight against corruption. “A key enforcement signal is the continued use of asset recovery mechanisms through the High Anti-Corruption Court (HACC),” she notes. “On January 9, 2026, the HACC partially upheld a claim filed by the Specialized Anti-Corruption Prosecutor’s Office (SAPO) and ruled that certain assets belonging to the family of the former acting head of the Kharkiv Regional Recruitment Centre of Recruitment and Social Support were unjustified. The ruling relied on monitoring findings from the National Agency on Corruption Prevention (NACP), underscoring the growing importance of this tool in illicit enrichment cases.”

Additionally, Didenko says that on January 14, 2026, National Anti-Corruption Bureau of Ukraine and SAPO conducted investigative measures and served a notice of suspicion under Article 369(4) of the Criminal Code of Ukraine (bribe offer to public officials) on the head of one of the parliamentary factions. On January 16, 2026, the HACC imposed a preventive measure in the form of bail amounting to UAH 33,280,000.”

In the Works

Poland’s Nuclear Plant Reaches Key Milestones

Critical progress was made toward Poland’s first nuclear power plant, including state aid approval and key contract annexes, according to Greenberg Traurig Local Partner Tomasz Korczynski. “Poland’s first nuclear power plant is to be built in the Choczewo municipality, in Pomerania,” he reports. “This key infrastructure project is of strategic importance to Poland’s energy transition, given that most of the country’s energy is currently generated using fossil fuels. The nuclear power plant will also help ensure energy security and independence. It is undoubtedly the largest and most complex infrastructure project ever undertaken in Poland.”

“The turn of the year was marked by three significant events for the development of this project,” Korczynski adds. “On December 9, the European Commission approved state aid for the project. This gave the green light for the transfer of funding and further implementation of the project. This prompted a swift response from the Polish government, which, on December 30, provided Polskie Elektrownie Jadrowe (the state company responsible for project development) with treasury bonds worth PLN 4.6 billion (more than EUR 1 billion).”

“Also, at the end of 2025, an annex to the Engineering Development Agreement (EDA) was concluded between Polskie Elektrownie Jadrowe and the Westinghouse-Bechtel consortium. Signed on December 29, the annex allows for the completion of engineering and fieldwork. The EDA precedes the EPC, the end-goal agreement that will cover the implementation of the project,” he says. Finally, “on January 13, the Westinghouse-Bechtel consortium has chosen Arabelle Solutions to supply steam turbine and generator systems for all three units of the nuclear plant, along with the major supporting equipment needed to run the steam cycle,” Korczynski reports. “These components form part of the turbine island, a key element of the non-nuclear part of the power plant that enables the conversion of heat generated in the reactor into electricity.”

Bulgaria’s Black Sea Exploration Nears Start

CMS Sofia Managing Partner Kostadin Sirleshtov reports that “in December 2025, the prospecting and exploration agreement signed between the Bulgarian Government and Shell in April 2025 for Block 1-26 Khan Tervel field in the Black Sea entered into force, thus allowing for the start of the exploration activities in 2026,” Sirleshtov reports. “Also, in December 2025, one of the largest photovoltaic projects in Bulgaria – the Aratiden project – added an additional 15-megawatt peak installed capacity by completing Stage 3 of its development, while Suhildol – the largest photovoltaic project in Bulgaria of 600-megawatt peak – completed its Environmental assessment hearing.   

Hungary’s MOL Aims for Serbia’s NIS

Forgo, Damjanovic & Partners Managing Partner Zoltan Forgo and JPM & Partners Senior Partner Jelena Gazivoda draw attention to a potential acquisition with MOL signing a Heads of Agreement to acquire a majority stake in NIS.

“Hungary’s energy giant MOL announced on January 19, 2026, that it had signed a binding Heads of Agreement with Russia’s Gazprom Neft to acquire a 56.15% stake in Serbia’s Naftna Industrija Srbije (NIS), currently owned by the Gazprom Group,” Forgo reports. “The sale of the Russian ownership interests in NIS came under consideration after the Serbian company was sanctioned in October 2025 by the US Treasury Department’s Office of Foreign Assets Control (OFAC), which resulted in the suspension of crude oil deliveries via the Adria (JANAF) pipeline and halted refinery operations. Although a special OFAC license issued on December 31, 2025 allowed the resumption of limited operations, the OFAC set a fixed negotiation period (ending on March 24, 2026) for the divestment of Russian assets in the company.”

“According to MOL’s statement, the parties aim to sign the SPA by March 31, 2026, and the completion of the transaction requires the approval of the OFAC and the approval of the Serbian authorities,” Forgo adds. “While the purchase price has not been officially announced, according to Hungarian media reports, the estimated value of the shares to be acquired by MOL is approximately EUR 1.4 billion.” According to him, “it is worth noting that MOL is currently also in negotiations with ADNOC, the national oil company of the United Arab Emirates, to join the owners of NIS as a minority shareholder. The Serbian State has expressed its intention to increase its existing 29.9 % stake by 5% in the company.”

“On December 31, 2025, OFAC issued a special license to NIS, authorizing NIS to continue certain otherwise prohibited transactions and activities through January 23, 2026,” Gazivoda adds. “The Special License applies to NIS and its subsidiaries operating in the Republic of Serbia and authorizes, inter alia, the importation of crude oil, the transportation of crude oil via the JANAF pipeline system (subject to a separate OFAC authorization), and the resumption of crude oil processing activities at the Pancevo Refinery. On December 24, 2025, OFAC previously issued a separate license authorizing NIS and relevant stakeholders to engage in discussions and negotiations with shareholders and other interested parties for purposes of restructuring the ownership of NIS, with such authorization remaining in effect through March 24, 2026.”

Gazivoda reports that “in early 2026, discussions with MOL regarding a potential acquisition by MOL of an equity interest in NIS have been intensified. MOL currently owns and operates three petroleum refineries located in Hungary, Slovakia, and Croatia, as well as two petrochemical facilities in Hungary and Slovakia. The company also maintains an extensive retail fuel network, comprising approximately 2,400 service stations across ten countries in Central and Southeastern Europe, including the Republic of Serbia.”

“Any transaction resulting in the acquisition of NIS shares by MOL would be subject to OFAC review and a determination that the proposed ownership restructuring is consistent with applicable US sanctions laws and regulations,” Gazivoda points out. “If approved, such a transaction would materially increase MOL’s participation in the Serbian energy market. However, given the limited duration of the current Special License and the regulatory review required, it is not feasible to consummate the contemplated transaction and obtain all necessary OFAC authorizations by January 23, 2026.”

Regulators Weigh In

Austria Aligns Permanent Establishment Rules with OECD

DLA Piper Partner and Head of Tax Philipp Stanek explains Austria’s revised guidance on home office permanent establishments, now closely aligned with the new OECD commentary. “The Austrian tax authorities have, at least since 2019, taken a very expansive approach in concluding that home offices constitute permanent establishments by assuming a factual power of disposal of the enterprise over the home office of one of its employees,” Stanek notes. In November 2025, “the OECD released a significant update to the Commentary on Article 5 of the OECD Model Tax Convention, offering long-awaited clarity on the increasingly common issue of whether an employee’s home office can constitute a permanent establishment (PE). The update introduces a more structured framework, centered on two key elements: a 50% working time threshold and a commercial reason test.” According to him, “in reaction to the OECD’s clearer framework – particularly the 50% threshold – the Austrian tax authorities issued revised guidance on January 4, 2026, which now aligns much more closely with the updated commentary.”

Stanek points out that “under the revised commentary, a home office will generally not be regarded as a place of business of the enterprise if the employee performs less than 50% of their total working time from that location within any 12 months. This provides a concrete and practical benchmark, replacing earlier, more interpretative approaches based on concepts of permanence and duration. Where home office use exceeds the 50% threshold, the analysis does not end. Instead, a PE may exist depending on the specific facts, and the focus shifts to whether the work conducted from that state is functionally linked to the enterprise’s business there.”

“The commentary places heavy emphasis on whether there is a commercial reason for carrying out the activities from the other state,” Stanek adds. A commercial reason is likely where the individual’s presence enables or facilitates business activities in that state; the enterprise would otherwise maintain premises there; the employee’s role requires regular interaction with customers, suppliers, group companies, or other stakeholders in that state; or the work requires real-time or specialized local interaction. Conversely, no commercial reason exists when the home office arrangement is driven purely by HR considerations, employee preference, cost savings, or interaction that is incidental or insignificant.”

In Related News

Ukraine Joins OECD Anti-Bribery Group

“In December 2025, Ukraine joined the OECD Working Group on Bribery, strengthening peer engagement on foreign bribery standards,” Didenko reports. “Ratification of the OECD Anti-Bribery Convention is expected to be the next milestone.”

Bulgarian Energy Sector Sees Leadership Changes

“December 2025 was a very dynamic month for Bulgaria, as following the street protests, the Government resigned just before the adoption of the euro in the country,” Sirleshtov says. “The resignation of the Bulgarian Government led to several changes in the energy sector as the experienced and highly respected CEO of the electricity transmission system operation (TSO) Angelin Tsachev was replaced by the Chairman of the Board of the natural gas TSO Kiril Georgiev and the long-standing CEO of Bulgarian – Greece natural gas interconnector Teodora Georgieva also stepped down.”

This article was originally published in Issue 12.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.