Earlier this year, a draft version of the clarifying rules was released; however, not all of the draft changes are included in the final decree.
The final decree is intended to reduce the administrative burden on taxpayers and to clarify what has been perceived to be certain vague provisions under the documentation rules.
To reduce the administrative burden, the definitions of transactions for which taxpayers are not required to prepare transfer pricing documentation are modified and defined more precisely. For instance, taxpayers are not required to prepare transfer pricing documentation for transactions for which the value does not exceed HUR 50 million (approximately U.S. $219,000) in the tax year.
Also, taxpayers are not required to prepare transfer pricing documentation for all cost-recharges originally invoiced by third (i.e., independent) parties, whereas the former rules allowed this relief only for services provided/goods transferred as part of non-core activities. Still, transfer pricing documentation would need to be prepared if the costs of services/goods are “recharged” to related parties.
The new guidance also modifies the range of accepted arm’s length profit margins for low value-added intercompany services. Under this measure, the values of mark-ups between 3% and 10% are considered to be an arm’s length profit margin (the prior range was 3% and 7%).
Read a June 2013 report [PDF 125 KB] prepared by the KPMG member firm in Hungary: KPMG Transfer Pricing Newsletter
Contact a tax professional with KPMG's Global Transfer Pricing Services.