|Enterprises qualify as related parties if they are connected by direct or indirect majority shareholding or they are able to appoint or dismiss the majority of the key management or the supervisory board of the other enterprise.|
Hungarian TP legislation requires taxpayers, except small enterprises, to document each inter-company agreement under which delivery was performed during the tax year in question by the time the corporate tax return was filed.
Based on current transfer pricing regulations, taxpayers may prepare a country specific or a combined transfer pricing documentation.
In case of low value added inter-company services the use of a mark up between 3% and 7% is arm’s length by law provided that special conditions are met.
Some transactions, transaction types are exempted by the decree from the preparation of the documentation. Among others, transactions not exceeding HUF 50 million in value, net of VAT, or transactions where third party costs are recharged in full to a related party, there is no need to prepare a transfer pricing documentation.
If you need greater certainty there is also a possibility to submit an APA (Advance Pricing Arrangement) request to reach an agreement with the Hungarian tax authorities in regard to your future inter-company transactions. For the period of validity of the resolution no transfer pricing documentation is required.