Transfer pricing relates to the inter-company pricing arrangements between related parties. Inter-company transactions across borders are increasing rapidly and are becoming much more complex. Hungary becoming an integral part of the business community in the European Union, we are seeing international businesses use Hungary for shared service centres for Central and Eastern European countries, contract and fully fledged manufacturing centres, financing and research and development centres as well as a favourable location for international holding companies. Global integration and new business practices challenge multinational corporations to find innovative transfer pricing solutions. Stricter penalties, new documentation requirements, increased information exchange, improved training and specialization are some of the tools used by tax authorities in this global "profit race".
In order to comply with transfer pricing rules worldwide and especially in Hungary, our transfer pricing team will work with you to develop a comprehensive tax planning strategy.
Potential issues:
- You need help and guidance with documentation
- The Tax Authority is investigating your approach to transfer pricing
- You want to coordinate your group's transfer pricing policies
- You need help to clarify what the Hungarian legislation means for your business
- You would like to take advantage of transfer pricing for tax optimalization
- You would like to apply for an Advance Pricing Arrangements (APA)
How we can support you
We have created a set of transfer pricing services to assist you in achieving your strategic global business objectives. Our transfer pricing group will use the experience and expertise they have acquired to help you turn a problem into a solution.
Documentation
- Preparation of consistent documentation for all types of inter-company transaction, in compliance with local regulations. This includes the preparation of country-specific risk assessment and country-specific documentation when necessary.
- Advice regarding transfer pricing documentation prepared by the client, in order to ensure compliance with local requirements and consistent disclosure of information.
- Where companies hold Group Documentation / Master File centrally we can localise that for a Hungarian tax purposes.
- Supply of information on developments in local and foreign regulations, and other issues.
Advance Pricing Agreements
As of 1 January 2007 it is possible to apply for advance pricing agreements with tax authorities which can provide certainty with respect to pricing methodology on related party transactions. We can assist both the application and negotiation process.
Dispute resolution
- Assistance in administrative and judicial procedures on transfer pricing related matters
- Assistance in international disputes on transfer pricing issues (e.g. mutual agreement procedures)
Planning
Transfer pricing planning identifies opportunities to:
- Implement supportable transfer pricing policy
- Mitigate the incidence of disputes with tax authorities
- Mitigate the possibilities of double taxation of profit allocation between related parties
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