Hungary: transfer pricing

Alessandro PasutTransfer pricing: after the modification of the Accounting Act in June 2013 followed by its amendment effective since 1 January 2014, related party entities may perform transfer pricing adjustments in a more effective way. The subsequently accounted difference of the arm’s lengths price and the applied price related to sold/purchased products and services during a given period may be accounted for by the related parties as follows.

The difference of prices can be accounted for as part of the historical value of the asset in case of asset purchase; as amendment to costs/expenditures accounted for in case of purchases of services; as part of net sales revenue in case of sales. This practice can be applied even without issuing correction invoices instead of performing corporate income tax base modifications.
As of the tax year 2013, the new rules set out the application of such year-end adjustment corrections instead of the other methods previously used frequently (e.g. other/extraordinary income/expenditure) that often gave rise to significant risks.

 

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