Hungary: Transfer pricing

Alessandro PasutTransfer pricing: in case related parties decide to use the new accounting method, differences relating to the current year are to be accounted for in the general ledger of the current year’s balance sheet preparation day at the latest. The authorities have also confirmed that the correction cannot be treated as a modification to the consideration of original and individual transactions if the correction solely aims at the proper profitability in accordance with the contract concluded between the parties. This practically means that issuing a correction invoice mentioned in the VAT Act is not required; the accounting is to be treated as falling out of the scope of VAT and it can be substantiated by any kind of document being considered as acceptable proof according to the Accounting Act. The above rules may significantly ease the operation of companies and clarify the year-end adjustment accounting practice. However an appropriate contractual background and the availability of proper documents are required.

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