Hungary: Proposed amendments to advance pricing arrangement rules and introduction of public CbC reporting
Public CbC reporting would be introduced for the financial year beginning on or after 22 June 2024.
Proposed amendments
The Ministry of Finance submitted to the Parliament on 18 October 2022 draft legislation proposing amendments to the rules for advance pricing arrangements (APAs) and introducing public country-by-country (CbC) reporting.
APA rules
The APA rules would be amended effective 1 January 2023 to provide that APA applications can only be requested for full tax years and the duration of the bilateral and multilateral procedures would be slightly limited, while their scope would be extended to tax years preceding the filing date if certain conditions are met. Once the changes become effective, the authority fees for APA extensions would be increased and the rules on the tax audit ban concerning APA procedures would be clarified.
Public CbC reporting
Public CbC reporting would be introduced for the financial year beginning on or after 22 June 2024 as follows:
- If the consolidated turnover of a Hungarian resident ultimate parent company exceeds HUF 275 billion in the last two consecutive years, or in the case of a non-Hungarian resident ultimate parent company the consolidated turnover exceeds €750 million, the Hungarian resident taxpayer would be required—subject to certain conditions—to prepare, publish and make available an income tax information report for the later of the two consecutive financial years.
- The report would be required to include information on the activities of the ultimate parent company or of the standalone company and of all related companies included in the consolidation. The report would primarily cover the activities, number of employees, revenues and other tax-related financial data of the group companies. The above information would be presented to each concerned Member State/tax jurisdiction.
- The report would be required to be filed and published by the ultimate parent company/standalone company with the annual financial statement and on its website.
- The new obligation would not apply to groups of companies operating exclusively in Hungary.
Read a November 2022 report prepared by the KPMG member firm in Hungary
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