Management of year-end transfer pricing adjustments, introduction of new transfer pricing reporting obligation

One of the most essential points of the Tax Bill package approved in Summer was the management of year-end transfer pricing adjustments. Accordingly, as of 2022, if the prices applied or the profit realized by the tested party does not prove to be at arm’s length, the corporate tax base should be adjusted in line with the median value of the arm’s length range, unless the taxpayer provides reasoning why a value other than the median meets the arm’s length principle the most.

In addition, the Summer Tax Bill package also provides that taxpayers subject to transfer pricing documentation will also be obliged to submit a transfer pricing related report as part of the annual corporate income tax return. The details are to be laid down in Decree 32/2017 of the Ministry for National Economy, the draft version of which was recently released by the Ministry of Finance, calling for opinions from the public. The opinions may be submitted by December 17.

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Tax Newsletter 2022/20
Tax Newsletter 2022/20