Up to now – Hungary was the first in CEE
that introduced statutory transfer pricing documentation requirements in 2003 – very complex transfer pricing requirements pertained to affiliated
companies. Therefore, group-pricing should be measured in line with the arm’s
length principle and be strictly documented. Moreover, unlike in international
practice, the Hungarian transfer pricing documentation obligations cover domestic
intragroup transactions too. As tax authorities examine transfer prices very
closely, it has become vital for groups to have a consistent, reliable TP-system.
This is especially so, considering the record high Hungarian penalties for
non-compliance that amount to HUF 2 million (appr. EUR 6,500) per transaction per year.
