Changes related multinational companies from 1 January 2023

We are going to inform you below on the main elements of the changes related multinational companies that are in effect from 1 January 2023.

  1. Transfer pricing
  1. Threshold

The transfer pricing documentation threshold increases from HUF 50 million to HUF 100 million.

  1. Interquartile range - median

A change already applicable for the 2022 tax year is that the interquartile range must be used in arm's length pricing whenever the pricing is made using a public database or a database that can be checked by the tax authorities. If the price used in a transaction between a taxpayer and its related party falls outside the arm's length range, then as a general rule only the midpoint (median) of the arm's length price range shall be accepted as the arm's length price, and the transfer pricing adjustment should be made to that point. An exception to this is, if the taxpayer can demonstrate that a value within the range other than the median corresponds best to the transaction under consideration, in which case an adjustment should be made to that value rather than the median. Until now, the entire interquartile range (lower or upper quartile) may have corresponded as arm's length prices, and it was enough to adjust to a value in the interquartile range.

  1. Reporting obligations in the corporate tax return

As part of the corporate tax return, related companies will be subject to a new reporting obligation, whereby they will be required to provide information on transactions with related companies to determine the arm's length price. The reporting may affect not only taxpayers who are obliged to register transfer pricing, but also all taxpayers who have transactions with associated enterprises (except for taxpayers who are small size company on the last day of the tax year).

The reporting obligation also extends to transactions for which no transfer pricing documentation is otherwise required: a simplified (party details, transaction name, transaction value) reporting will also be required e.g. for to pass on costs from an independent party without profit (cost overheads), free transfers of funds and transactions with a private individual.

Taxpayers are obliged to include the following information in their corporate tax returns as related parties and transactions as full reporting obligation:

  • name of the related party transaction;
  • the sectoral classification (according to TEÁOR'08) most representative of the transaction;  
  • name of the related party, its tax number, the country of residence of the foreign affiliate;
  • net transaction value; 
  • the price applied in the transaction (final price);
  • tax base adjustment; 
  • transfer pricing method used;
  • indicators related to the transaction (indicators, profitability, interest, royalty rate);
  • type of accounting statement (Hungarian, IFRS, other);  
  • arm's length price or price range;

The new obligation will already arise in corporate tax returns for the year 2022. This is in line with the previous regulation, which required to prepare the transfer pricing documentation for the year before the filing of the corporate tax return. Under the new regulation, the existence of this documentation will be checked by the Tax authority, as the obligation to provide information in practice requires the existence of the transfer price documentation.

  1. Other changes

The rules and conditions for the aggregation of transactions are also tightened. Purchases will no longer be aggregated with sales of goods manufactured from purchased materials, nor will transactions involving expenses be aggregated with transactions involving primarily revenue.

  1. Penalty

The penalties for failure to keep records will be tightened from tax year 2023. In the case of missing or incomplete transfer pricing documentation, the general default fine per register is increased from HUF 2 million to HUF 5 million, and in the case of repeated infringements from HUF 4 million to HUF 10 million.


  1. Income tax information report for multinational companies (CbCR)

Directive 2021/2101/EU of the European Parliament and of the Council amending Directive 2013/34/EU, published on 1 December 2021, requires certain multinational companies with revenues of more than Euro 750 million to disclose information on corporate tax in a separate report, applicable for the first time for the financial year starting on or after 22 June 2024.

In line with the EU harmonization, the Hungarian Accounting Act introduces a regulation on the content of the report containing corporate tax information, which mainly affects large companies with revenues of more than HUF 275 billion (in certain cases, the Hungarian subsidiary may also be required to prepare the report). Companies with -consolidated- revenues exceeding HUF 275 billion for two consecutive yearsare required to prepare a corporate tax information report.

A reporting obligation also applies to companies required to prepare annual report which is a subsidiary of an ultimate parent company that is not subject to the law of an EU Member State and which has had consolidated revenues of more than EUR 750 million for 2 consecutive financial years.

A parent company at the highest level not subject to the law of an EU Member State as well as a branch of an independent company must also publish a report containing corporate tax information if its annual net turnover exceeds HUF 2.4 billion.

The scope of the data to be reported as part of the report containing corporate tax information is similar to the information contained in the CbC report. Under the new regulation, this information must be reported on an EU Member State basis for each country separately and information on other tax jurisdictions on an aggregated basis, except for countries and territories considered by the European Union as non-cooperative from a tax point of view. For these countries, data should also be reported separately by tax jurisdiction.

The reports containing corporate tax information must be published on a standard form at the same time as the annual report, in accordance with the general rules on filing and publication. The new requirement will apply for the first time for the financial year beginning on or after 22 June 2024.


Due to the general nature of our information letter, this cannot be considered as consultancy on which a decision to be made. Regarding this, please contact our colleagues about any occurring unique questions in connection with our current information letter, our colleagues will be happy to assist you.

Budapest, 20 January 2023


Gubicza Krisztina, chartered tax expert, managing director