With the end of 2024, the deadline is approaching again for the members of the multinational groups concerned to comply with their current country-by-country reporting obligations. This transfer pricing deadline has been effective since 2017, and if missed, you could face a hefty fine.
Data reporting or notification? What are the relevant CbCR obligations?
CbCR and CbCR notification are two similar terms imposing different administrative tasks on the company.
Country-by-country reporting (CbCR)
Only multinational groups of companies with consolidated net sales revenue of EUR 750 million or more are subject to the CbCR filing and notification obligation (group sales data must be considered for the financial year preceding the financial year subject to reporting).
The CbCR includes financial data (affiliated and independent data presented separately),headcount and asset data, activities carried out by group members and technical data (group name and fiscal year),broken down by country. The deadline for filing the CbCR is no later than 12 months after the last day of the multinational group's financial year, so the deadline now approaching at the end of December is for the 2023 report.
In theory, only the ultimate parent company is required to file a country-by-country report, which national tax authorities can access on the basis of existing information exchange conventions, provided there is an effective convention between the countries.
This is why it is important to check in each case whether Hungary has an automatic information exchange agreement with the country of tax residence of the company filing the CbCR, or whether it has entered into force by 31 December 2024 at the latest.
CbCR notification
Please note that a Hungarian member company also has administrative obligations if the group is subject to CbCR reporting but it is not the Hungarian entity that prepares and files the report. In this case the Hungarian entity has a notification obligation. The CbCR notification must contain the group’s fiscal year, the member company filing the CbCR, and its country of residence.
Hungarian member companies must file the 2024 CbCR notification for the given fiscal year electronically to the Hungarian tax authority by 31 December 2024 (the deadline for companies with different fiscal years is the last day of the fiscal year).
What sanctions can the tax authority impose in case of non-compliance with these transfer pricing obligations?
You must always pay attention to the filing of the CbCR on time! In the event of failure to comply with the notification or change notification obligation, or late, incorrect, untrue or incomplete data reporting, the tax authority may impose a default fine of up to HUF 20 million on the taxpayer or the group member designated to report the data.
How to comply with the notification, change notification and data reporting obligations?
The transfer pricing notification, change notification and data reporting obligations must be fulfilled electronically on the designated NAV form 24T201T.
