Page 30 - Central and Eastern European Transfer Pricing Review

30 | CEE Transfer Pricing Review

What is the statute of limitations Transfer pricing study Other than complying with a
on assessment of transfer pricing overview requirement per the previous
adjustments? question, describe the benefts, if
Five years after the last day of the Is preparation of a transfer pricing any, of preparing and maintaining
calendar year in which taxes should have study required i.e. can the a transfer pricing study?
been declared or reported, or paid in the taxpayer be penalized for mere The beneft of preparing a transfer pricing
absence of a tax return or declaration. failure to prepare a study? study is that the taxpayer shifts the
Yes. For certain intra-group transactions. burden of proof to the tax authority.
Transfer pricing However, there are different transfer Otherwise, the preparation of transfer
pricing documentation requirements
disclosure overview (e.g. simplifed, standalone, pricing documentation is obligatory
Are disclosures related to transfer consolidated, European transfer pricing based on the relevant Hungarian
regulations. If a company fails to prepare
pricing required to be prepared or documentation). its documentation or the documentation
submitted to the revenue authority The exemptions are, briefy, as follows: prepared is incomplete, it will be subject
on an annual basis (e.g. with the to a default penalty of up to
tax return)? to date, a taxpayer has been exempt HUF2 million (approximately EUR7,000)
Yes. A company should prepare from transfer pricing document per missing documentation per year.
transfer pricing documentation and preparation liability in the case of
the underlying calculations before the agreements concluded with private Where a taxpayer repeatedly fails
submission of its tax return at the latest, individuals and being a small or to comply with the transfer pricing
and it should declare on the tax return medium sized enterprise documentation obligation the upper
form the transfer pricing documentation effective 1 January 2012, the cap of the default penalty can be
is prepared in line with the European exemption rules were extended. doubled. And, in the case of repeated
documentation standards, but the Accordingly, taxpayers are not transgressions, four times the general
documentation does not have to be liable to prepare transfer pricing penalty might be applicable. The
submitted to the tax authority. documents: upper cap of the default penalty can
reach HUF8 million (approximately
What types of transfer pricing for transactions covered by an APA EUR28,000) per missing or incomplete
information must be disclosed? for cost recharges originally documentation per business year.
A company should declare in the invoiced by third (independent) To satisfy the requirement and/or
tax return that the transfer pricing parties obtain the benefts, are there any
documentation is prepared in line with requirements on when the transfer
the European documentation standards. for cash gifts pricing study must be prepared
for transactions performed
What are the consequences between the taxpayer s foreign and submitted?
of failure to prepare or submit branch offce and related parties The transfer pricing documentation
disclosures? (where the exemption method should be prepared for every fnancial
If the taxpayer does not prepare its might apply in order to avoid year. The deadline is the submission
transfer pricing documentation before double taxation under the double date of the corporate tax return.
the statutory deadline, a default penalty taxation arrangement between However, this date must not be later
can be imposed. the relevant country and Hungary) than the 150th day after the end of
the fnancial year. If the tax authority
for any transactions where the requests the documentation during
accumulated value does not exceed an audit of the company, it must be
50 million Hungarian forints (HUF) presented within 3 days of the request.
(175,000 Euros (EUR)), calculated
from the date of the agreement until
the end of the tax year.

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