Due to global tax reforms, transfer pricing conditions are changing significantly; the companies concerned are mostly concerned about double taxation and inflation, which will affect the pricing of linked transactions in the long term – according to the survey of the international financial consulting firm EY, which was conducted among large company managers in more than 40 countries, including Hungary.

As it turned out, according to the vast majority of respondents (84 percent), there is a moderate or significant risk of extending double taxation to their company, which is related to the introduction of global minimum tax rules. Seven out of ten (71 percent) professionals indicated inflation, and 51 percent indicated higher interest rates as factors influencing their company’s transfer pricing practices.

This high degree of uncertainty in transfer pricing has an impact on many business decisions, such as capital placements or double taxation, Trace Fultz, head of global transfer pricing training at EY, pointed out in the announcement.

Transfer pricing refers to the pricing of transactions within affiliated companies.

The announcement reminds us that the National Tax and Customs Administration (NAV) has been placing special emphasis on the control of transfer pricing for years. According to EY experts, this is not expected to change this year either, as a new data provision obligation is imposed on the corporate groups obliged to prepare the register. The relevant legislation also stipulates that they must provide information about their related transactions in their corporate tax return, they wrote.

The reform of the international tax system also brings drastic changes in the life of domestic companies – András Módos, EY’s tax partner, points out in the announcement. Domestic companies also have to reckon with the termination of the American-Hungarian tax treaty and the introduction of the global minimum tax, and changes in corporate tax and accounting rules also impose many new tasks on them.

EY’s 2024 international tax and transfer pricing survey was prepared between September and October 2023. During the survey, 1,000 managers of large companies in 47 jurisdictions, including 19 industries in Hungary, were asked about various international tax and transfer pricing topics.