Guidance on international dispute resolution procedures

(mutual agreement procedures)

  1. Purpose of the procedure

The international dispute resolution procedure is a mechanism aimed at resolving disputes arising from the interpretation or application of international conventions (agreements) for the elimination of double taxation on income and, where applicable, on capital.

A typical reason for initiating a mutual agreement procedure is when the tax authority of one jurisdiction increases the income tax base during a tax audit. This increase may lead to double taxation due to the tax liability (declared and/or paid tax) in the other jurisdiction, affecting either the same person (juridical double taxation) or another person (economic double taxation). A common example of procedures resulting from economic double taxation is the tax authority’s adjustment of transfer prices applied to transactions between associated enterprises.

Hungarian law recognises three types of international dispute resolution procedures:

  1. European Union dispute resolution procedure (hereinafter: DRM-MAP),
  2. dispute resolution procedure under the Arbitration Convention (hereinafter: AC-MAP),
  3. dispute resolution procedure under tax conventions (hereinafter: DTA-MAP).

During these procedures, the competent authorities of the different jurisdictions (in Hungary, the Department of International Taxation and Transfer Pricing of the Ministry for National Economy) directly consult with each other, upon request to resolve double taxation or other question in dispute in the specific case of an affected person.

Within the legal framework, the affected person may choose from these three types of procedures.

  1. Main characteristics of the procedures

2.1 The DRM-MAP

The DRM-MAP is regulated by Chapter III/Aof Act XXXVII of 2013 on certain rules of international administrative cooperation relating to taxes and other public charges (hereinafter: the Aktv.),whichtransposed Council Directive (EU) 2017/1852 of 10 October 2017 on tax dispute resolution mechanisms in the European Union. The rules of this chapter do not supersede the international convention itself, particularly its (conflict of) rules relating to specific income types. The Aktv. regulates only the dispute resolution procedure itself.

The DRM-MAP can be initiated if

a) the concerned tax year commenced on or after 1 January 2018, and

b) the other jurisdiction concerned is a Member State of the European Union.

The main feature of the DRM-MAP is that if the competent authorities fail to reach an agreement, an arbitration panel, or in legal terminology, an advisory commission, shall be set up. Furthermore, the regulation guarantees that the authorities take the necessary steps through judicial remedies.

The DRM-MAP process is illustrated below, based on the European Commission’s diagram:

DRM-MAP process DRM-MAP process

2.2 The AC-MAP

The legal basis of the AC-MAP is the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises, signed in Brussels on 23 July 1990 (hereinafter: the Arbitration Convention), which was promulgated by Act XXXVI of 2006. Chapter IV of the Aktv. also contains supplementary provisions, which in most cases refer to the rules of the DTA-MAP. This procedure may only cover transfer pricing issues, including both cases arising between legally independent associated enterprises and those concerning permanent establishments.

The affected associated enterprises must be established in a Member State of the European Union.

This procedure also provides for the possibility of setting up an arbitration panel. If the competent authorities fail to reach an agreement within two years during the MAP phase, the case must be referred to an arbitration panel (an advisory commission in the terminology of the Arbitration Convention). The arbitration panel shall deliver its opinion within six months, which shall be binding on the Member States. However, the competent authorities may, by mutual agreement, bring a decision that deviates from the opinion of the arbitration panel.

2.3 The DTA-MAP

The DTA-MAP is a procedure that can be initiated based on the Mutual Agreement Procedure (MAP) article (typically Article 25) of a bilateral international convention for the elimination of double taxation with respect to taxes on income and, where applicable, on capital. The rules of the conventions shall be applied together with the additional rules set out in Chapter IV/A of the Aktv.

Under the Aktv., there is no possibility for arbitration within this type of procedure; arbitration is only possible if the applicable convention explicitly provides for it. A significant portion of Hungary’s conventions currently in force do not include such a provision. However, the Hungarian notification of the Multilateral Convention (MLI) amending tax conventions, promulgated in Hungary by Act III of 2021, includes the possibility of incorporating arbitration into tax conventions. As a result, in conventions concluded with jurisdictions that have also signed the MLI and opted for arbitration, the convention was amended to include the arbitration rules.

  1. Stages of the procedure

The procedure may involve the following four stages:

  1. the complaint stage,
  2. the mutual agreement procedure (MAP),
  3. the arbitration / advisory commission / dispute resolution phase (in the strict sense), and
  4. implementation of the agreement (and the decision based on it).

3.1 Complaint stage

3.1.1 Who can submit a complaint?

The complaint to initiate the procedure (hereinafter: the complaint) may be submitted to the competent authority by the affected person. An affected person is a person who is a resident of a jurisdiction party to the applicable tax convention for tax purposes and whose taxation is directly affected by a question in dispute.

In the case of DRM-MAP and AC-MAP, the affected person, or, if several affected persons are involved in the procedure, each affected person, must be a resident of a European Union Member State for tax purposes.

3.1.2 Where should the complaint be submitted?

In the case of DRM-MAP, the complaint must be submitted to each concerned competent authority. An exception applies to natural persons and small and medium-sized enterprises (SMEs) within the meaning of Section 4(4a)(3) of the Aktv., who only need to submit the complaint in their State of residence.

For the purposes of the DRM-MAP, the following are considered small and medium-sized enterprises (as opposed to the definition in Act XXXIV of 2004 on Small and Medium-sized Enterprises and Support for Their Development):

a) an enterprise that does not exceed the limits of at least two of the following three criteria on its balance sheet date:

i. balance sheet total: EUR 20,000,000,

ii. net sales: EUR 40,000,000,

iii. average number of employees during the business year: 250 or

b) groups consisting of parent and subsidiary undertakings to be included in consolidation which, on a consolidated basis, do not exceed the limits of at least two of the following three criteria on the balance sheet date of the parent undertaking:

i. balance sheet total: EUR 20,000,000,

ii. net sales revenue: EUR 40,000,000,

iii. average number of employees during the business year: 250.

In the AC-MAP and DTA-MAP procedures, an affected person who is a Hungarian tax resident may file the complaint domestically, and an affected person who is a foreign tax resident may file the complaint abroad.

In Hungary, the complaint must be submitted to the International Taxation and Transfer Pricing Department of the Ministry for National Economy.

3.1.3 How can the complaint be submitted (in what form)?

3.1.3.1 In the case of an affected person obliged to communicate electronically

Pursuant to Section 19 (1) of the Act CIII of 2023 on the Digital State and Certain Rules for the Provision of Digital Services (hereinafter: the Daptv.), a domestically resident business organization and the legal representative of the affected person are obliged to communicate electronically.

A business organization includes, among others: a business company (general partnership, limited partnership, limited liability company, joint stock company), a European company (SE), an economic interest grouping, a European economic interest grouping, a cooperative, a European cooperative society (SCE), a Hungarian branch of a foreign-based company, a sole proprietorship, a sole trader, as well as an association, foundation and religious legal entity with a tax number.

According to Section 19 (5) of the Daptv. “[i]f the law makes electronic communication – or the method of electronic communication – mandatory in relation to the making of a declaration, a declaration that does not comply with this requirement is invalid – except in cases specified in law or government decree”.

The affected person and the legal representative who are obliged to communicate electronically may therefore submit the complaint and its attachments, the additional information, and other submissions during the procedure exclusively electronically.

The complaint and other documents can be submitted on the following case type e-Paper, depending on the type of procedure:

DRM-MAP:       European Union dispute resolution procedure in the field of income and capital taxes (in Hungarian: Európai uniós vitarendezési eljárás jövedelemadók és vagyonadók területén)

AC-MAP:           Dispute resolution procedure under the Arbitration Convention in the field of transfer pricing (in Hungarian: Választottbírósági Egyezmény szerinti vitarendezési eljárás transzferárazás területén)

DTA-MAP:        Dispute resolution procedure under tax conventions for the elimination of double taxation with respect to taxes on income and on capital (in Hungarian: Adóegyezmények szerinti vitarendezési eljárás jövedelemadók és vagyonadók területén)

These e-Papers are located within the “Tax (NGM)” [“Adó (NGM)”] topic group. The recipient of the e-Papers is the International Taxation and Transfer Pricing Department of the Ministry for National Economy.

3.1.3.2 In the case of an affected person not obliged to communicate electronically

An affected person who is not obliged to communicate electronically may, at its choice, submit the complaint and other submissions on paper or electronically.

The paper submission must be sent to the address of the Ministry for National Economy: H-1011 Budapest, Vám utca 5–7. or H-1358 Budapest, P.O. Box 17.

In the case of electronic communication, the submission of documents is subject to the provisions described above relating to the affected person obliged to communicate electronically.

3.1.4 What is the deadline for submitting a complaint?

The complaint shall be submitted within three years from the receipt of the first notification of the action resulting in, or that will (likely) result in the question in dispute, regardless of whether the affected person has recourse to the remedies available under the national law of any of the jurisdictions concerned. The first notification is the communication of the first instance tax authority decision under the Aktv.

Some conventions may deviate from this three-year deadline and may prescribe a shorter (e.g., two-year) deadline. The MLI amending tax conventions defined the renewal of the rules of the mutual agreement procedure as a minimum standard. This means that in all conventions that did not comply with the new OECD standards, the rules could be amended. Of course, this only affected those tax conventions in which both contracting jurisdictions are parties to the MLI and the bilateral tax convention was designated by both contracting jurisdictions, i.e. Hungary and the other contracting jurisdiction of the tax convention. This also applies to deadlines other than the three-year deadline.

In addition to the three-year deadline, a complaint concerning a tax assessment period starting before 1 January 2018, or such a notification from another competent authority, must be received by the Hungarian competent authority within the statutory limitation period (i.e., posting or sending it is not sufficient, the complaint or notification must be received). In the case of later years, the statutory limitation period does not preclude the possibility of initiating the procedure. It applies to all tax assessment periods that if the complaint or notification has been received, the statutory limitation period that occurs during the procedure is no longer an obstacle to continuing the procedure, the related tax authority audit, and the implementation of the agreement or decision.

3.1.5 Which tax year can the complaint cover?

For DRM-MAP, the concerned tax years may be tax assessment periods commencing on or after 1 January 2018.

For AC-MAP and DTA-MAP procedures, this depends on the temporal scope of the given tax convention.

One complaint may cover multiple tax years.

3.1.6 How much does the procedure cost?

The procedure is free of charge. No fees or charges are required.

3.1.7 What should the complaint contain?

The complaint must include the following:

a) name, address, tax identification number, and other information necessary for identification of the affected person and any other person concerned,

b) the tax periods concerned (tax years),

c) details of the relevant facts and circumstances of the case (including details of structure of the transaction and of the relationship between the affected person and the other parties to the relevant transactions, as well as any facts determined in good faith in a mutual binding agreement between the affected person and the foreign tax administration, where applicable) and more specifically, the nature and the date of the actions giving rise to the question in dispute (including, where applicable, details of the same income received in the other jurisdiction concerned and of inclusion of such income in the taxable income in the other jurisdiction concerned, and details of the tax charged or that will be charged in relation to such income in the other jurisdiction), as well as the related amounts in the currencies of the jurisdiction concerned, with a copy of any available supporting documents;

d) reference to the applicable national rules,

e) reference to the applicable tax convention, where more than one tax convention is applicable, a statement by the affected person as to which tax convention is being interpreted in relation to the relevant question in dispute,

f) the following information provided by the affected person, together with copies of available supporting documents:

fa) an explanation of why the affected person considers that there is a question in dispute,

fb) details of any legal remedies (appeals) and litigation initiated by the affected person regarding the relevant transactions, and of any court decisions concerning the question in dispute, regardless of the jurisdiction in which the proceedings were conducted,

fc) where applicable, a copy of the final decision giving rise to the question in dispute, in the form of a final tax authority decision, tax audit report, assessment notice or other equivalent document, and a copy of any other document issued by the tax authorities with regard to the question in dispute, regardless of the jurisdiction in which it was issued,

fd) information on any complaint submitted by the affected person under another mutual agreement procedure or under another dispute resolution procedure with regard to the question in dispute,

fe) in the case of DRM-MAP, a commitment by the affected person to respond as completely and quickly as possible to all appropriate requests made by the competent authorities of the jurisdictions concerned and to provide any documentation at the request of the competent authorities of the jurisdictions concerned,

ff) in the case of DRM-MAP, a declaration by the affected person that it is aware that the submission of the complaint puts an end to any other mutual agreement procedure ongoing concerning Hungary initiated in relation to the relevant question in dispute,

g) in transfer pricing matters, the transfer pricing documentation: master file and local file(s) with their annexes, for example: contract, database study,

h) in the case of DRM-MAP, a declaration by the affected person that its complaint has been submitted to all Member States concerned, and

i) if a representative acts on behalf of the affected person, proof of its right of representation in accordance with the relevant provisions of Act CLI of 2017 on Tax Administration Procedure(e.g. power of attorney).

The Hungarian competent authority may request necessary additional data and documents in a notice.

The complaint and its annexes must be submitted in English, in addition to the Hungarian version, upon request by the Hungarian competent authority.

The complaint may also be submitted if the double taxation resulted from a bona fide (good-faith) (foreign) self-adjustment (voluntary disclosure, self-correction).

3.1.8 Document retention

The taxpayer shall retain the related documents, regardless of the method of registration, for 10 years from the last day of the calendar year in which a tax return, data report, or notification should have been filed, or in the absence of a return, data report, or notification, the tax should have been paid. [Section 78(6a) of the Act on the Rules of Taxation]

If the taxpayer or its associated enterprise initiates an international dispute resolution procedure, the obligation to retain documents shall be extended until the conclusion of the international dispute resolution procedure. If the obligation to retain documents is imposed on the payer or the employer, the obligation to retain documents shall be extended upon the order of the tax authority until the conclusion of the international dispute resolution procedure. [Section 78(7) of the Act on the Rules of Taxation]

3.1.9 Procedure of the competent authority after receipt of the complaint

The competent authority acknowledges receipt of the complaint to the domestic affected person who submitted the complaint or to the foreign competent authority within two months, and within one month in the case of AC-MAP. Within the same deadline, the competent authority informs the other competent authorities concerned of the domestic submission of the complaint.

The Hungarian competent authority may request the affected person to provide additional information in Hungarian and English within three months of receipt of the complaint, or two months in the case of AC-MAP. The deadline for providing additional information is three months from the date of receipt of the request.

In a procedure initiated based on a complaint by a foreign tax resident, the Hungarian competent authority may contact the foreign competent authority within three months of receipt of the notification – or two months in the case of AC-MAP – to request additional information, even on multiple occasions in the case of an incomplete response. In the case of AC-MAP and DTA-MAP, the additional information may also be requested from the concerned domestic tax resident associated enterprise of the foreign tax resident applicant (this applies primarily to transfer pricing cases). In addition, the necessary additional information may be requested on several occasions during the procedure.

3.1.10 Decision on acceptance of the complaint

The competent authority decides whether to accept or reject the complaint within six months of receipt of the complaint or of the requested additional information within the above deadline. The complaint shall be rejected if:

a) it lacks the required information even after providing additional information,

b) there is no question in dispute, or

c) it was not submitted within the deadline.

The legal remedy against the rejection is an administrative lawsuit, except in the case of DRM-MAP, if not all jurisdictions’ competent authorities or – in the case of legal remedies – courts have rejected the complaint, in which case arbitration may be requested.

3.1.11 Unilateral relief

Within the deadline for deciding on the acceptance of the complaint, the competent authority may also decide to resolve the question in dispute on a unilateral basis. In such a case, it issues a decision to that effect, which becomes final and enforceable by the tax authority if the affected person expressly accepts it in writing within 30 days of notification and renounces any other right to remedy or withdraws any such remedy.

3.2 Stage of the mutual agreement procedure

If the complaint is accepted and in the absence of a unilateral relief (or in the absence of its acceptance by the affected person), the competent authorities negotiate a solution to the question in dispute through a mutual agreement procedure.

The consultation period is two years, which can be extended by one year in justified cases for DRM-MAP and DTA-MAP. This period is calculated from the date of the last notification of a decision by one of the jurisdictions on the acceptance of the complaint. In the case of AC-MAP, the two-year period commences on the day on which the complaint meets the required content without any further request for additional information.

The affected persons do not participate directly in the mutual agreement procedure.

If the competent authorities reach an agreement on the question in dispute during the mutual agreement procedure, the Hungarian competent authority notifies this agreement to the affected person, as a decision.

The decision made based on the agreement becomes final and binding on the Hungarian competent authority and the tax authority if:

a) the affected person accepts the decision within 60 days of the date of notification of the decision in case of the DRM-MAP, or within the deadline set out by the agreement otherwise, and

b) the affected person renounces the right to any other remedy related to the question in dispute.

Where proceedings regarding such other remedies have already commenced, the decision only becomes final and binding once the affected person has provided evidence that action has been taken to terminate those proceedings. If the deadline is exceeded, the decision will be revoked, and the procedure will be terminated.

Based on the final decision, the tax authority adjusts the original tax liability of the affected person by means of a decision, regardless of any possible statute of limitations.

The affected person is not required to pay default interest or tax penalties on the tax payment obligation imposed on it as a result of this adjustment, nor is entitled to interest on the tax to be refunded.

In the case of AC-MAP, if one of the affected enterprises is liable to a serious penalty based on a final ruling made in a court or administrative proceeding due to the actions that form the basis for the profit adjustment, the mutual agreement procedure cannot be carried out (nor can the advisory commission be set up). A serious penalty in Hungary is a criminal penalty imposed for tax-related crimes, or a tax penalty imposed for a tax deficit exceeding HUF 50 million.

3.3 Advisory commission stage

If the mutual agreement procedure is unsuccessful or if the complaint in the DRM-MAP is rejected by at least one, but not all of the competent authorities of the jurisdictions concerned (taking into account the outcome of the judicial procedure), an advisory commission (arbitration panel) shall be set up. In this case, the advisory commission decides on the resolution of the dispute or the admissibility of the complaint.

The Aktv. contains detailed regulations on the advisory commission to be set up in the case of DRM-MAP. This is summarized below.

3.3.1 Establishment of an advisory commission under DRM-MAP

A request for dispute resolution by an advisory commission may not be submitted while proceedings are pending before an authority or court of any of the jurisdictions concerned regarding the rejection of the complaint, or if the time limit for initiating an appeal procedure has not yet expired, or if the court has upheld the rejection decision during the appeal procedure.

The request must be submitted within 50 days. This deadline is calculated from the latest date of notification of the decision on admissibility of the complaint taken by the competent authorities, or in the case of a court decision, from the latest date of notification of the decision, or from the latest date of notification of the information from the competent authorities on the failure of the mutual agreement procedure. The request must be submitted to all competent authorities, except for natural persons and small and medium-sized enterprises, which submit this request in the same manner as their complaint.

The request for dispute resolution by the advisory commission must, in addition to the rules governing the complaint, include:

a) an indication of the jurisdiction in which the affected person is considered a resident for tax purposes,

b) an indication that the request for dispute resolution by the advisory commission is due to the rejection of the complaint or the failure of the mutual agreement procedure,

c) the data necessary to calculate the deadline for submitting the request,

d) a statement that there is no legal remedy in any of the jurisdictions concerned against the decision rejecting the complaint, or that the affected person who submitted the request has renounced such remedies,

e) a declaration by the affected person and its representatives that they undertake to maintain confidentiality regarding the information they come to know during the procedure, and

f) the specific request of the affected person that the competent authorities of the jurisdictions concerned set up the advisory commission.

If the admissibility of the complaint has been established by the advisory commission and none of the competent authorities has requested the initiation of the mutual agreement procedure within 60 days of the date of the notification of the decision of the advisory commission, the advisory commission ex officio shall provide an opinion on how to resolve the question in dispute. In such a case, the advisory commission shall be deemed to have been set up on the date on which that 60-day period expired.

If the question in dispute does not concern double taxation, the Hungarian competent authority may refuse to set up the advisory commission. An administrative lawsuit may be initiated against this decision before the Metropolitan Court.

The advisory commission shall be set up not later than 120 days from the receipt of such request from the affected person.

The Hungarian competent authority may refuse to set up the advisory commission if, in Hungary and in direct connection with the question in dispute:

a) a final penalty has been imposed for budgetary fraud;

b) a final two hundred percent tax penalty has been imposed; or

c) the tax identification number of the affected person has been finally cancelled due to a violation of the rules concerning the depositing and publishing of the annual report.

Where proceedings were commenced that could potentially lead to such consequence, the Hungarian competent authority may stay the proceedings as from the date of acceptance of the complaint until the date of the final outcome of those proceedings.

3.3.2 Advisory commission procedure under DRM-MAP

The advisory commission decides on the admissibility of the complaint or delivers its opinion on the resolution of the question in dispute within six months of its establishment. In the latter case, the deadline may be extended by three months. The advisory commission notifies its decision, or opinion to the competent authorities and the affected persons within 30 days of its adoption.

The affected persons and the Hungarian competent authority are obliged to provide any information, evidence, or document requested by the advisory commission, unless it would be contrary to law, contain a business or professional secret, or the disclosure of the information is contrary to public policy. The affected person may provide information to the advisory commission if this possibility is provided for in the rules of functioning. The affected person or its representative is required to appear at the meeting of the advisory commission upon the request by the advisory commission. If the affected person so requests, it may appear or be represented before the advisory commission with the consent of the competent authorities of the jurisdictions concerned.

The advisory commission shall base its opinion on applicable international conventions and national rules. The advisory commission shall adopt its opinion by a simple majority of its members. Where a majority cannot be reached, the vote of the chair shall determine the final opinion.

The competent authorities may take a decision which deviates from the opinion of the advisory commission. However, if they fail to reach an agreement as to how to resolve the question in dispute within six months of the notification of the opinion, they shall be bound by that opinion.

The Hungarian competent authority immediately notifies the affected person of the final decision of the competent authorities concluding the dispute resolution procedure in a decision. The rules on the finality and enforceability of the decision by the tax authorities are the same as those applicable to the decision taken in the mutual agreement procedure.

In the event of agreement between the competent authorities and the approval of the affected persons, the decision concluding the dispute resolution procedure is published in its entirety, but in the absence of agreement or approval, only an abstract version thereof is published. The affected person may also request that the information contained therein not be made public if it contains secrets or is contrary to public policy.

  1. Interaction with other proceedings

The complaint can be submitted even in a case closed by a final tax authority decision, and regardless of whether a legal remedy (appeal) has been initiated.

The international dispute resolution procedure does not exclude the initiation or continuation of other proceedings. However, the competent authority must be informed of these.

However, in the case of DRM-MAP, the submission of a complaint puts an end to any other mutual agreement procedure concerning Hungary that is currently ongoing in relation to the question in dispute. Such other ongoing proceedings concerning the relevant question in dispute shall come to an end with effect from the date of the first receipt of the complaint by any of the competent authorities of the jurisdictions concerned.

The initiation of the procedure does not have a suspensive effect on the payment of taxes, surcharges, and penalties.

4.1 Judicial proceedings

The international dispute resolution procedure may be initiated or continued in parallel with court proceedings initiated regarding the question in dispute. However, if an agreement is reached in the mutual agreement procedure, then the initiation of the termination of the court proceedings is necessary for the finality of the decision. If the court proceedings conclude with a final judgment, the DRM-MAP must be terminated, but the other two types of MAPs may continue. In this case, however, the Hungarian competent authority may not derogate from the decisions of their judicial bodies, and an arbitration panel may not be set up.

The advisory commission does not need to be set up while the court proceedings are ongoing.

4.2 Impact on procedural deadlines

In the case of DRM-MAP, if a legal remedy procedure has been initiated in any of the concerned jurisdictions in relation to the question in dispute, the time limit for the decision to accept or reject the complaint, as well as the time limit for the mutual agreement procedure, is interrupted and starts again on the date on which the decision taken in the legal remedy procedures becomes final or on which the said procedure is otherwise definitively concluded or suspended.

For AC-MAP and DTA-MAP, if:

a) the adjustment of the audit or other action likely resulting in the question in dispute is not yet final; or

b) the affected person initiates administrative or judicial proceedings in any of the jurisdictions concerned in relation to the question in dispute,

the time limit for requesting additional information, deciding on the admissibility of the complaint, and the mutual agreement procedure shall be interrupted and shall commence again on the day on which the audit finding, other action, or decision in the appeal proceedings became final, or on which the appeal proceedings were otherwise finally closed or suspended.

  1. Rules regarding secrets (confidentiality)

The laws on the protection of transmitted information and the protection of trade, business, industrial or professional secrets or trade processes shall also be applied appropriately in the international dispute resolution procedures.

Information communicated, transmitted, or obtained by the competent authority during cooperation under international tax conventions is considered a tax secret.

  1. OECD information

Information on mutual agreement procedures is available on the website of the Organisation for Economic Co-operation and Development (OECD) at https://www.oecd.org/en/topics/dispute-resolution-in-cross-border-taxation.html. The OECD website also publishes a country-specific database (MAP profiles) containing useful information on the competent authorities and procedural rules of foreign jurisdictions.

  1. Governing rules and international standards

This information is not comprehensive; it only contains the most important rules.

The following rules and international standards must be considered in the procedures:

a) (bilateral) international conventions for the elimination of double taxation with respect to taxes on income and, where applicable, on capital;

b) the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises, signed at Brussels on 23 July 1990, the Convention on the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises and the Protocol of Signature thereto, the Protocol amending the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises of 23 July 1990, and the Convention on the accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic to the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises and the Protocol of Signature promulgated by Act XXXVI of 2006;

c) Chapters III/A–IV/A of Act XXXVII of 2013 on certain rules of international administrative cooperation relating to taxes and other public charges (Aktv.);

d) Act CL of 2017 on the Rules of Taxation (Art.);

e) Act CLI of 2017 on Tax Administration Procedures (Air.);

f) Act CIII of 2023 on the digital state and certain rules for the provision of digital services (Daptv.);

g) domestic legal regulations regarding the taxation of companies and individuals, including:

i. Act CXVII of 1995 on Personal Income Tax,

ii. Act LXXXI of 1996 on Corporate Income Tax and Dividend Tax,

iii. Decree 32/2017. (X. 18.) of the Ministry for National Economy on the transfer pricing documentation;

h) OECD Model Tax Convention on Income and on Capital and its Commentary;

i) OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations.