Hungary: Draft legislation to implement public country-by-country reporting

Legislation would require multinational groups to disclose certain tax-related information on a CbC basis

Draft legislation to implement public country-by-country reporting

Draft legislation (on 18 October 2022) was submitted to the Hungarian National Assembly to implement the EU public country-by-country (CbC) reporting directive.

In line with the EU rules, the draft legislation would require multinational groups to publicly disclose certain tax-related information on a CbC basis for financial years starting on or after 22 June 2024, when:

  • The ultimate parent entity (UPE) is based in Hungary and the consolidated revenues of the multinational enterprise (MNE) group exceed HUF 275 billion (approximately €750 million based on the 21 December 2021 exchange rate) in each of the last two consecutive financial years.
  • A qualifying subsidiary / branch of the MNE group is based in Hungary and the consolidated revenues of the MNE group exceed HUF 275 billion (approximately €750 million based on the 21 December 2021 exchange rate) in each of the last two consecutive financial years, if the UPE does not fall within the scope of the law of an EU member state.

KPMG observation

Based on the draft text, Hungary would require MNEs in scope to explain the reasons behind any significant differences between the income tax accrued and income tax paid, if such significant differences exist. While the EU public CbC reporting directive allowed Member States to permit in-scope groups to defer the disclosure of commercially sensitive information, for up to five years, the draft Hungarian proposal doesn’t make use of this option.

Read a November 2022 report prepared by KPMG’s EU Tax Centre
 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.