Accounting for branch offices

What is our proposal about?

The Hungarian branch offices of foreign businesses must comply with complex legal regulations, including Hungarian and international tax legislation, too (bilateral agreements, EU directives, the OECD Model Convention, the Commentary and the Report as well as the OECD Transfer Pricing Guidelines). The branch office’s accounting system must ensure that its outputs are locally compliant and reliable. In addition to local reporting and filing liabilities, the branch office must also prepare internal reports and statements for the parent company regularly. These often include an analysis or summary of the differences between the Generally Accepted Accounting Principles (GAAP) of Hungary and the country where the parent company is seated.

What are the advantages our service offers?

We make sure that the branch office’s accounting system supplies reliable and accurate data for internal and external reports, that local and foreign tax liabilities are duly complied with and that the related procedures are flexibly adjusted to the specific needs and characteristics of the business, enabling our clients to operate and manage their operations efficiently, and to identify and manage any risks.

These translate to the following actual advantages:

• transparent, efficient and flexible accounting system, one that is supplementary to existing solutions and builds on existing best practices of the industry;
• accurate and reliable management of GAAP differences;
• accurate and reliable financial data, tax computations;
• online access to foreign language reports;
• professional support in the local implementation of global programs and policies;
• risk identification and management, improved transparency;
• accurate and timely interim and yearend closing;
• co-operation and direct communication with the foreign (regional or global) decision makers;
• continuous advisory support;
• due, accurate and reliable internal reports;
• professional support during local statutory audits.

Why RSM Hungary?

1. Our service solutions build on existing best practices of many industries, ensuring that the branch office’s accounting system and its outputs are locally compliant.
2. Our experts have several years of experience in designing and implementing accounting systems that are adjusted to an industry’s specific characteristics and in operating these systems efficiently.
3. Our workflows involve highly automated solutions with results being checked at critical points regularly.
4. Optionally, typically at the beginning of a co-operation, we assess existing procedures, make recommendations for more efficient solutions and continuously evaluate results and experiences during an interim period.

The scope of our accounting services for branch offices covers:

• we revise the parent company’s accounting system and the existing solutions and procedures for local compliance. Also, we provide formal and practical recommendations for improving related procedures, workflows. Optionally, we may liaise with the parent company directly;
• we review the existing technologies and procedures behind Hungarian tax compliance, reporting, interim closing and the preparation of the yearly financial statements. We then identify and suggest opportunities for further efficiencies;
• we design and implement the branch office’s accounting system, a customized solution assuring compliance with Hungarian statutory and tax requirements, efficiently supplementing the parent company’s existing bookkeeping solutions and identifying GAAOP differences which are then reported in line with the company specific requirements;
• we carry out the branch office’s bookkeeping in line with Hungarian regulations;
• we assess and summarize the Hungarian tax obligations of the branch office and prepare and file Hungarian tax returns;
• we prepare the financial statements of the branch office;
• we provide professional support during statutory or group audits.