Under a new legislation that took effect in May and requires new reporting requirements for the transfer prices of multinational firms operating in Hungary, a fine of up to HUF 20 million can be issued to companies that do not comply with the new rule, Grant Thornton Hungary warns in a press statement sent to the Budapest Business Journal.
Gábor Szarka, an expert at Grant Thornton, warns managers that multinational firms operating in Hungary must comply with the new reporting requirements, as since the end of May, the automatic exchange of information regarding the transfer price documentation of multinational firms have entered into force, and country-by-country reporting is a part of it.
The new rules affect those companies whose revenue in their consolidated annual accounts reached EUR 750 million two years ago, Granth Thorton Hungary describes.
Members of international groups of companies, who fall under Hungarian tax regulations, must register with the Hungarian National Tax and Customs Administration (NAV) by the end of this year, if they apply a fiscal year that is the same as the calendar year. In the case of a different fiscal year, they must comply with the rules by the end of the next fiscal year.
Companies also have to indicate the Hungarian member’s name, place of establishment, tax identification number, and if they are qualifying or exempted from providing country-by-country reporting, Grant Thornton explains. In the latter case, the qualifying company’s name and tax residence needs to be reported to the tax administration.
If the notified data has changed, modifications need to be reported to the tax administration. The report’s electronic application sheet is not yet available on the tax administration’s homepage, the company warns.
If a firm that falls under this legislation fails to complete the reporting requirements, does not report data modifications, does not hand in the report by the deadline, or hands in a false, inaccurate or incomplete report, the tax administration may fine them up to HUF 20 mln.