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In 2022, significant changes were made to transfer pricing and the preparation of transfer pricing documentation, with a multiplication of the fine and the introduction of a transfer pricing data reporting obligation. Please note that non-compliance with changes entered into force for the 2023 tax year could result in the imposition of multiple default penalties. Based on the experience of the past year, businesses are increasingly likely to face direct transfer pricing audits on transactions with their related parties.

Krisztina Reinics

2024.06.26Accounting

IFRS 18 – New chapter in financial reporting

IFRS 18, which was published in April 2024, represents a significant change in the way entities adopting IFRS will present their financial performance. Companies covered by IFRS will be required to prepare their financial statements using a new structure to make their financial performance more comparable.

Zoltán Balogh

2024.06.20Audit

NIS2 and risk management

The issue of cybersecurity is of paramount importance among the new challenges of the digital age. The European Union\'s NIS2 Directive establishes a regulatory framework to protect the EU\'s digital infrastructure by enhancing information security. NIS2 is not just another bureaucratic hurdle, but an opportunity for companies to review and strengthen their IT risk management strategies. How can good risk management help you prepare for NIS2?

Zoltán Balogh

2024.06.05Audit

NIS2 Directive – registration deadline and severe sanctions

Hungarian companies affected by the NIS2 Directive are required to file their NIS2 registration application to the Supervisory Authority of Regulated Activities (SZTFH). Even though thousands of companies in Hungary are affected by the NIS2 Directive, many are not even aware that the new cybersecurity regulation applies to them. If an organization under the NIS2 Directive fails to meet the requirements and deadlines of the NIS2 Directive in Hungary, it may face significant financial consequences: a penalty of up to HUF 50–350 million.

Viktória Clamba

2024.06.03Tax

New CIT incentive for electric battery investment projects

As of 2024 a new, significant corporate income tax (CIT) incentive is introduced for investment projects aiming at construction of electricity storage facilities (i.e. batteries).

Miklós Héhn

2024.05.24Accounting

Accounting for and taxation of dividends

In Hungary the resolution on dividend is taken once a year when the financial statements are approved and the company\'s supreme body decides on the amount and payment of the dividend. Under the effective legal regulations, untied retained earnings supplemented by the after-tax profit from the previous financial year may be disbursed as dividend.

Petra Palicz

2024.05.21ECJ VAT

Foreign VAT refund - The Court of Justice of the EU comes to the aid of taxpayers

The Court of Justice of the European Union (CJEU) has ruled (C-746/22) that a Hungarian rule which does not allow foreign taxpayers to submit their VAT refund documents even in the second instance procedure is not in line with the EU law. The CJEU found that the Hungarian legislation infringes the principle of VAT neutrality and the principle of effectiveness, as it prohibits taxpayers from providing the additional information requested by the first-tier tax authority in an appeal to the second-tier tax authority.

Marcell Andó

2024.04.30Tax

Importance of SME qualification – Micro-, small and medium sized enterprises?

The correct SME qualification (micro, small or medium-sized) has a particular importance for Hungarian companies when applying for certain EU tenders or reviewing the eligibility for corporate income tax (CIT) base decreasing items or CIT credits, but also for determining whether a given company is subject to innovation contribution or not. The Hungarian SME qualification has to be carried out based on a complex methodology prescribed by the corresponding act, and the SME status has to be indicated in the annual CIT return.

Marcell Andó

2024.04.29Consultancy Tax

CIT and LBT calculations – important aspects to consider

The deadline for submitting and paying corporate income tax (CIT) and local business tax (LBT) for 2023 is approaching. It is not worth leaving the preparation of the CIT and LBT calculations as well as preparing the corresponding returns to the last minute. In our blog, we would like to highlight some of the key areas which require special attention when preparing these calculations.

Tibor Kovács

2024.04.15Tax VAT

Exhibitions, events abroad – foreign VAT issues

Companies organising a conference, event or exhibition abroad – whether it is their own event, or an event organised abroad by an event management company – need to be aware of the circumstances when they are to apply for a foreign VAT number or pay VAT abroad. This is because failure to comply with VAT obligations can lead to heavy default penalties and tax fines.