Digital TP – transfer pricing data reporting

On 27 July 2022, Act XXIV of 2022 on the establishment of Hungary’s central budget for 2023 was published in the Hungarian Gazette. This law amended and supplemented the rules governing transfer pricing in several respects. In view of the legislative change, in addition to the transfer pricing documentation requirements, taxpayers are also subject to a new data reporting obligation as part of their corporate tax returns.

Details of data reporting are set out in Decree 32/2017 on the registration obligation related to the determination of the normal market price. (X. 18.) NGM Decree (NGM Decree) contains. The data to be requested is specified in Section 8/A of the NGM Decree. § stipulates.

What does this mean in practice? What obligations must be fulfilled?

Transfer pricing data must be reported as part of the corporate tax return submitted after 31 December 2022.

In order to fulfil their reporting obligations, those required to report must complete forms ’29-ATP-01 and ’29-ATP-KV. The ATP-01 form must be completed with the data relating to the transaction in question, while the ATP-KV form must be completed with the data relating to affiliated companies in connection with the transaction listed on the ATP-01 form.

The data report must contain the following information for each transaction (consolidated transaction) in each row (ATP-01 sheet):

1. Name of transaction (selectable from a drop-down list of 53 items), possible exemption title (selectable from 4 titles)
2. Most relevant TEÁOR code (select from drop-down menu)
3. Standard market pricing method (based on 6 predefined methods)
4. Profitability indicator (if we use the resale, cost and income method, or the method based on net transaction profit), choosing from 7 methods
5. Profitability indicator’s normal market value or range
6. Profitability indicator value actually achieved by the tested party in the transaction
7. Accounting standard applied to the tested party (4 options)
8. In the case of services, licences or franchise agreements, if the chosen method for determining the normal market price is the comparative price method, it must be indicated whether a percentage commission or a commission-based service fee was applied, and what the basis for calculating the fee was.
9. In the case of services, licences or franchise agreements, the normal market value or price range must be provided.
10. In the case of services, licences or franchise agreements, the percentage fee applied must also be specified.
11. In the case of service, licence or franchise transactions, the accounting standard applied by the party whose financial data is taken into account for the calculation of the royalty or service fee must also be specified.
12. In the case of loans, borrowings, financial leases, sureties, guarantees or cash pool transactions, the reference interest rate or, in the case of fixed interest rates, an indication thereof must be included (if pricing is based on the comparative pricing method).
13. In the case of loans, borrowings, financial leases, sureties, guarantees or cash pool transactions, the interest premium, and in the case of fixed interest rates, the total interest rate, must be stated at its usual market value or price range.
14. In the case of loans, borrowings, financial leases, sureties, guarantees or cash pool transactions, the interest margin, the interest margin applied in the transaction in the case of fixed interest rates, and the total interest rate in the case of fixed interest rates must also be specified.
15. In the case of other transactions (not covered by transactions 8-14), the unit value or range of the normal market price must be specified here.
16. If it concerns another transaction, the market value or range measurement unit must be specified here.
17. In the case of other transactions, the unit value of the price calculated with the tax base adjustment applied in the transaction must be entered here.

By 2023, the nature of the aggregated transactions and the tested party involved in the transaction must be provided as new data. A new feature is that negative values can now be entered on the 2329 tax return.

ATP-KV sheet data content

It should be noted that only one ATP-01 form may be completed for a single transaction, whereas multiple ATP-KV forms may be completed for a single transaction. On this sheet, indicate which transaction, i.e. which ATP-01 sheet, the information provided here relates to.

The rows contain the details of each connected party, and the following details must be entered in the columns:

1. Names of affiliated companies
2. Tax number of affiliated company
3. Tax jurisdiction of the connected party (from the drop-down menu)
4. Tax number of a foreign company
5. Net value of the transaction specified in Hungarian forints, settled in the current year, by affiliated company
6. The correct amount of corporate tax base adjustment for each affiliated company during the transaction.

How can we support our customers?

In collaboration with our company’s tax and IT experts, we have developed a Windows-based application that can be run on multiple computers and prepares data reports in the format defined by the Hungarian Tax and Customs Administration (NAV). Our application can compile data reports from data tables in the format specified by the NAV or from any other data structure.

What are the benefits of using our application?

• We customise or develop our application individually for each customer, so they do not receive a boxed application, but exactly what they need.
• Our application does not require any development or connection to administrative or business software.
• Data reporting is significantly accelerated, and data is prepared accurately based on the information provided by the customer.
• Our application can be supplemented with additional functions, e.g. volume check, tax number check, value check, etc.
• We develop applications with fast turnaround times and short delivery deadlines.
• Our application performs tasks in a few minutes that would take hours or even days to complete manually, while ensuring that no data recording errors occur.
• We also perform data reporting tasks as a service, in which case our clients do not need to purchase the application.

If you like our offer, please contact our experts at the contact details below so that we can familiarise you and your colleagues with our application in detail and save you time, starting as early as tomorrow. We can even demonstrate how the application works in practice online. Make an appointment today.