On 18 October 2017, the Hungarian Ministry of National Economy (NGM) issued a decree on new Transfer Pricing Documentation rules.
According to the provisions of the Decree, a group is required to prepare a master file and a local file from fiscal year beginning on or after 1 January 2018, if it has at least one member registered outside of Hungary. If a taxpayer has to report any of its intercompany transactions, then the group has to prepare a master file.
The preparation deadline is 12 months after the end of the financial year and shall only be provided to the Hungarian tax authority upon request in case of an audit within a very short (usually 3-day) deadline. New rules already be applied for financial year 2017, but will be mandatory from financial year 2018 onwards. The master file shall include general, standardized information on all members of the group.
Local File reporting structure is generally in line with new Chapter V of OECD Transfer Pricing Guidelines but requires additional information. Every transaction or bunch of similar transactions exceeding the threshold of HUF 50 million has to be covered by the Local File.
