Tax Alert

We would like to inform you that the National Tax and Customs Administration has published its audit plan for calendar year 2024, in which it has confirmed that transfer pricing will be a priority in multiple areas.

The new transfer pricing reporting requirement, which was introduced in the previous tax year, along with the first data submissions, can be used for risk assessment and tax audit selection purposes. It is therefore possible that errors or potential tax issues identified in the data submission will result in focused transfer pricing audits in 2024.

In addition to the use of transfer pricing data for risk assessment purposes, the audit plan specifically mentions transfer pricing relating to the following areas:

• The high intensity audit of related party transactions of automotive industry
• The transfer pricing specific audits of pharmaceutical entities
• The verification of compliance with the conditions of Advance Pricing Agreements
• The verification of compliance with transfer pricing data reporting
• The verification of country-by-country reports and transactions identified as risky on the basis of cross-border arrangements
• The transfer pricing audits of taxpayers with loss-making or very low profitability who are engaged in intra-group manufacturing activities
• The audit of related party transactions involving intangible assets
• The audit of loan or other financial transactions between related companies

How can we help?

As can be seen from the above, transfer pricing is a high priority in the National Tax and Customs Administration's annual audit agenda, which mentions a number of industries and transaction types by name. In light of this and the increased default penalty of HUF 5 million per transaction, it has become particularly important that transfer pricing documentation is completed in full with sufficiently detailed analyses; also, that transfer pricing data is completed and submitted with the correct content for the previously closed financial year.

Our expert team will be pleased to assist you in fulfilling your transfer pricing documentation and transfer pricing reporting obligations.