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An Advance Pricing Agreement (APA) is an agreement between a taxpayer and a tax administrator that aims to avoid any transfer pricing disputes, by determining the arm’s length price for a controlled transaction.
Our infographic on advance pricing agreements is a sum-up of characteristics of APA in Czech Republic, Hungary, Poland, Romania and Slovakia.
CZECH REPUBLIC
No possibility of extension, but after three years, the application can be submitted again
HUNGARY
(Possibility to extend by max. 3 years if conditions remain unchanged)
POLAND
(Possibility to extend by max. 5 years if conditions remain unchanged)
ROMANIA
Extension is possible in case of long term contracts; the legislation does not provide an effective maximum period
SLOVAKIA
(Possibility to extend by max. 5 years if conditions remain unchanged)
A large multinational developer company was requiring complete consultancy in the field of transfer pricing in several countries they operate in. We provided the full scope of the service, from start to end.
CZECH REPUBLIC
Administrative fee – CZK 10,000 (approx. EUR 390)
The amount of the fee depends on the number of transactions assessed, or on the number of permanent establishments; regardless of whether it is a unilateral, bilateral or multilateral APA.
HUNGARY
Depending on the number of jurisdictions taking part in the APA, filing fees vary as follows:
Unilateral APA – HUF 8,000,000 (approx. EUR 21,000)
Bilateral APA – HUF 12,000,000 (approx. EUR 31,000)
Multilateral APA – HUF 12,000,000 (approx. EUR 31,000)
Act CL of 2017 on the Rules of Taxation effective from 1 February 2024: (1) The fee for the procedure to establish the arm’s length price shall be HUF 8 million in unilateral proceedings and HUF 12 million in bilateral or multilateral proceedings. Payment of the fee in instalments or deferred payment shall not be permitted.
In the case of proceedings for APA extension or modification, the fee is 50 percent of the fee paid in the original procedure. If the APA request is rejected or withdrawn, the HTA returns 85 percent of the fee already paid pertaining to the APA procedure. The pre-filing consultation is subject to an administrative fee. The fee for a pre-filing consultation is HUF500,000 (approx. USD1,780) per each consultation.
POLAND
1% of the value of the transaction that is the object of the agreement. However, in the case of:
Unilateral APA:
Bilateral or multilateral APA – min. PLN 50,000 (approx. EUR 11,800) and max. 200,000 PLN (approx. EUR 47,000)
Renewal fees are half of the amount of the fee for the renewed APA.
ROMANIA
For large taxpayers and other taxpayers with consolidated value of transactions higher than EUR 4,000,000:
For other taxpayers and consolidated value of transactions lower than EUR 4,000,000:
SLOVAKIA
Unilateral APA – EUR 10,000*
Bilateral and multilateral APA – EUR 30,000
*half amount applies to the taxpayer with the index of tax reliability „high“
Application responsibility: The tax administrator issues the APA on the basis of an application filed by the taxpayer. In other words, the tax administrator cannot issue the APA “ex officio”.
Language options: The application for the APA, to which the TPD shall be enclosed, too, must be filed in local language only*.
*except Hungary (where English, French, and German languages are also accepted) and Slovakia (where TPD might be accepted also in other language , however the tax authority might additionally request for the TPD submission also in Slovak language)
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