Significant increase in the volume of transfer pricing fines imposed

The Hungarian Tax Authority (‘HTA’) is conducting more focused transfer pricing audits in order to detect transfer pricing irregularities. This makes it even more important for companies to comply with the legal requirements, both in their operations and in the preparation of transfer pricing documentation.

According to the HTA, it conducted more than 200 audits in 2024. About a quarter of these resulted in establishments — more than double than in 2023. Tax base corrections in 2024 amounted to in excess of HUF 100 billion, which is more than double those in the previous year. Consequently, the level of default penalties imposed has followed the dynamic increase.

The HTA will expand the number of tax audits it carries out in this sector by allocating additional resources, focusing on industry-specific and risk-based selection methods.

Additionally, it plans to create Transfer Pricing Competence Centers to conduct even more thorough audits nationwide.  

KPMG can assist in the following ways:

• The effective preparation of local and master transfer pricing documentation in line with legal requirements and audit experience
• The accurate and timely preparation of the obligatory transfer pricing data disclosure within the corporate income tax return
• The quick and efficient determination of the arm’s length range (by preparing the benchmarking study)

If you have not yet begun preparing the local file and would like to receive expert assistance in relation to this, or if you have any further questions, please do not hesitate to contact us.