The Ministry of Finance of Hungary issued an amendment of Decree No. 22/2009 related to transfer pricing documentation requirements.
The amendment effectively increases the validity of an APA to 6 years. Under the new rules taxpayers recharging the consideration for services or products to several related enterprises must verify that the allocation methodology applied is at arm’s length.
The threshold for exemption from the transfer pricing documentation requirements is HUF 50 million (approximately US$224,000) for tangible or intangible property transactions, this being the transaction value in the tax year in question that must be taken into account. Separate rules are applicable to low value adding intra-group services.
From the final wording of the officially promulgated Decree, the provision providing relief from transfer pricing documentation obligations based on section 18 (8) of the Act on Corporate Income Tax has been removed. As such, transfer pricing documentation will have to be prepared in relation to transactions concluded by a foreign permanent establishment of a Hungarian company and its related parties.
