On 28 December 2022, the Hungarian Ministry of Finance published Decree 27/2022 (XII.28) which amends the Decree 32/2017 (X.18) on the documentation requirement related to the determination of arm’s length prices.
Increase threshold limit
According to the previous transfer pricing documentation regulations, no transfer pricing documentation had to be prepared for transactions with an annual transaction value of less than HUF 50 million. This threshold has now been raised to HUF 100 million (the new threshold can be applied in financial years from 2022 at the earliest).
Introduce interquartile range
According to the previous rules, it was enough to make the adjustment to the lower (minimum) value of the market range. However, under the new transfer pricing documentation rules, it is no longer sufficient to make the adjustment to the minimum value, must be made to the median value of the interquartile range including the “optimal” figures of the range.
Separate submission of Master file and Local file
In previous years, the master file and the local file together formed one document for each tax year. However, as of tax year 2023, the master file and local file are considered separate documents, with the latter being created per transaction or per consolidated transaction.
Increase penalty amount
The default penalty for violating the TP documentation requirements increased from HUF 2 million to HUF 5 million per intercompany transaction. In the case of repeated violations, the maximum fine has been increased from HUF 4 million to HUF 10 million.
