This training is designed to upskill employees in the accounting departments of companies that are expanding into the Hungarian market. It focuses on practical application and understanding of transfer pricing principles, compliance with Hungarian regulations, and how these fit into a broader international tax framework. Each module builds on the previous, ensuring a comprehensive understanding and practical application of the transfer pricing rules in Hungary.
Content:
Explanation of what transfer pricing is and why it is important.
OECD Transfer Pricing Guidelines and their relevance in the Hungarian tax context.
Overview of the Hungarian Tax Authority (NAV) and its role in transfer pricing enforcement.
Importance:
Understanding the basic principles of transfer pricing is critical for Italian companies to operate compliantly in Hungary. Without this foundational knowledge, they risk non-compliance and significant penalties.
Content:
Detailed discussion of Hungary’s specific transfer pricing regulations, particularly how they align with the OECD framework.
Analysis of Hungarian legislation, including local file requirements, the use of interquartile ranges, and the arm’s length principle.
Key dates for compliance (e.g., documentation deadlines and submission timelines).
Importance:
It is crucial for participants to understand how Hungarian law diverges from or aligns with international guidelines, as this will inform their decision-making and documentation processes.
Content:
Introduction to transfer pricing methods:
Comparable Uncontrolled Price (CUP)
Resale Price Method
Cost Plus Method
Transactional Net Margin Method (TNMM)
Profit Split Method
Detailed analysis of which methods are most applicable in Hungary based on industry-specific factors (with a focus on industries relevant to the company).
Importance:
Selecting the appropriate transfer pricing method is a key decision-making factor, and understanding how to apply these methods correctly is critical for ensuring compliance and avoiding disputes with the Hungarian tax authorities.
Content:
Hands-on exercises applying transfer pricing methods to typical intra-group transactions (e.g., intercompany loans, services, goods transfers).
Step-by-step guidance on calculating an arm’s length price and how to document the calculations.
Importance:
Participants need to be able to apply the theory to real-world situations. These exercises will solidify their ability to perform transfer pricing calculations and demonstrate how to integrate them into their financial reporting.
Content:
Detailed discussion on local and master file requirements in Hungary, with special attention to documentation thresholds.
What to include in documentation to avoid penalties.
Deadlines and penalties for non-compliance.
Importance:
Proper documentation is critical to passing a transfer pricing audit. Without clear and accurate documentation, companies risk substantial fines and reputational damage.
Content:
Real-life examples of transfer pricing audits in Hungary, including common errors companies make.
Discussion on how to avoid these errors.
Role-playing exercises where participants act as company representatives and auditors to simulate real-world scenarios.
Importance:
Understanding the potential pitfalls of a transfer pricing audit prepares participants to manage and mitigate risks. This module provides practical insight into the audit process.
Content:
Identifying and assessing transfer pricing risks.
How to use Advance Pricing Agreements (APAs) and intercompany agreements to mitigate risk.
Best practices for monitoring and reviewing transfer pricing policies regularly.
Importance:
Effective risk management is key to long-term success in managing transfer pricing in a multinational context. This helps ensure continuous compliance and reduces the likelihood of audits and disputes.