Worldwide, transfer pricing conditions are becoming increasingly unpredictable due to global tax reforms and inflation, according to an EY survey of 1,000 senior executives in more than 40 countries, including Hungary. Domestic companies must also take into account the termination of the US-Hungarian tax treaty and the impact of several local legislative changes.
The vast majority of participants (84%) fear double taxation as a result of the reforms introduced in international taxes. According to 71 percent of experts, and higher interest rates, according to more than half (51 percent) of research participants, the pricing of linked transactions will be affected in the long term.
The reform of the international tax system is taking place before our eyes, which will also lead to radical changes in the life of domestic companies. In addition to the termination of the US-Hungarian tax treaty and the introduction of a global minimum tax, many new tasks fall to companies, as corporate tax and accounting rules have changed, among other things.
– noted Andras Modus, Tax Partner at EY.
Transfer pricing is the Achilles' heel
NAV has been particularly focused on controlling transfer pricing for years. That is not expected to change this year either, as a new data obligation is imposed on corporate groups obliged to prepare the register. The relevant law also stipulates that they must provide information about their relevant transactions in their corporate tax returns.
- Three-quarters of respondents (75 percent) reported technological shortcomings in the field,
- Two-thirds of respondents (67%) consider low-quality data to be a major difficulty.
- At the same time, three-quarters of managers (73%) expect a significant improvement in risk management through investments in IT.
- Nine out of ten (88%) also expect spending cuts as a result of the improvements.
EY Expert Highlight: In transfer pricing, appropriate facts, data and documentation play a key role. Effective digital solutions can provide tremendous assistance in ensuring that the companies involved meet the requirements.
Follow Index on Facebook too!
