On 9 December 2022, the Hungarian Ministry of Finance issued a draft transfer pricing decree detailing a new transfer pricing reporting obligation. Accordingly, taxpayers are required to prepare a transfer pricing report on a transaction basis or on a consolidated transaction basis. Among other things, the report should contain the transfer pricing method and the selected indicator, the transaction value, the characterization of the transaction, certain administrative data on the parties involved, the most relevant TEÁOR code and the price range or the arm’s length price.
In addition to the above, significant changes to the transfer pricing documentation rules are expected as follows: (i) The threshold of HUF 50 million for transfer pricing documentation is expected to be raised to HUF 100 million. (ii) The penalty for failure to prepare transfer pricing documentation or for incomplete transfer pricing documentation is increased to HUF 5 million per transaction, and an additional HUF 5 million may be imposed for a missing or insufficient master file. (iii) In the case of intra-group services, more detailed information than previously should be provided on the pricing of such transactions.
The transfer pricing reporting obligation in the corporation tax return applies at the earliest to returns submitted after 31 December 2022.
