The prices applied by related parties in their transactions are called transfer prices. A Hungarian taxpayer has an obligation to prepare a transfer pricing documentation in the event that there has been a performance between the taxpayer and its related party(ies) on the basis of an oral or written agreement in the relevant tax year. The topic of transfer pricing has gained an increasing role with regards to the Tax Authority's control practice over the past few years and as a result of the constantly changing domestic and international regulations and the improvement of the corresponding requirements it is now one of the most complex areas in the field of taxation and audit.
Internationally, the ongoing change in the directives and regulations of the OECD (Organization for Economic Co-operation and Development) results in an increasingly stringent regulatory environment, taking into account the establishment of the BEPS (Base Erosion and Profit Shifting) action plan in particular. The primary goal of the BEPS package consisting of 15 action points is to ensure that profits made by companies are to be taxed in the countries where the value creation has actually been realized.
One of the elements of achieving the aforementioned objective is to control and clarify the pricing of intra-group transactions, i.e. the transfer pricing and to make such dealings more transparent.
As a consequence, there has been a significant in the relevant regulations for each country, including Hungary, in connection with documenting obligations of transfer pricing.
The BDO transfer pricing specialist team is grateful to assist you with the following matters:
- Assessment and review of transfer pricing documentation obligations;
- Planning, review and establishment of transfer prices and transfer pricing policies;
- Creating a transfer pricing map;
- Identifying related parties, determining the size of the company;
- Registering related parties;
- Commenting and reviewing intra-group contracts;
- Review, supplementation and preparation of master file and local files (transfer pricing documentations);
- Examination of already existing related party transactions;
- Preparation of benchmarking analyses using international databases;
- Determining the arm’s length price range;
- Preparation and support of Advance Pricing Agreements (APA) by taking part in the procedure;
- Support for investigations by the authority;
- Planning the pricing of intangible assets;
- Proposal relating to the structure of a group
- Preparation of Value Chain Analyses (VCA) and functional analyses;
- Preparation of Country Reports (CbCR), completing and submitting related forms.
Within the BDO international network, the Transfer Pricing Centre of the Central and Eastern European region was established in Hungary (Budapest). As a Regional center, we also prepare the necessary documentations and analyses in line with transfer pricing regulations in several surrounding countries. In addition, we are in close relationship with our coworkers present in 162 countries, which allows quick consultation on international transactions.
Our dedicated experts at BDO Hungary Tax Advisory Ltd. are looking forward to your inquiries on transfer pricing matters at the e-mail address [email protected].