Non-calendar fiscal year transfer pricing in Hungary

What is a non-calendar fiscal year and why is it applied?

Non-calendar fiscal year transfer pricing obligations arise when a company does not close its books according to the calendar year, but for example between July 1 – June 30 or October 1 – September 30. The reasons for applying a non-calendar fiscal year may include:

• Group-level consolidation – the parent company uses a different financial year, and the subsidiary aligns with it.
• Seasonal business cycle – common in agriculture, retail or tourism.
• Internal management decision – due to financial planning and cash-flow considerations.

Transfer pricing obligations in case of a non-calendar fiscal year

Transfer pricing rules in Hungary follow the financial year rather than the calendar year. This means that non-calendar fiscal year transfer pricing obligations require special attention: documentation requirements, filing deadlines and Country-by-Country (CbC) reports are all linked to the closing date of the financial year.

Deadlines for corporate income tax return and transfer pricing documentation

The corporate income tax (CIT) return must be filed by the last day of the 5th month following the end of the financial year. The same deadline applies to the preparation of transfer pricing documentation.

In the case of non-calendar fiscal year transfer pricing documentation, deadlines are always aligned with the company’s CIT return.

Examples of deadlines:

Typical sectors applying non-calendar fiscal years

The following sectors most often apply a non-calendar fiscal year:

• Manufacturing – electronics, automotive, pharmaceutical companies where the parent company uses a different financial year.
• Wholesale and retail – FMCG and fashion chains aligned with global inventory cycles.
• Financial and insurance sector – banks, leasing companies and insurers, where non-calendar year-ends are practical for consolidation.
• Service sector – IT, consulting and SSCs (shared service centers) adapting to their international group.

Transfer pricing documentation in case of a non-calendar fiscal year

A non-calendar fiscal year does not change the content of transfer pricing documentation, but the comparative data must always match the relevant financial year.

The central element of transfer pricing documentation, the Benchmark analysis, is often prepared through database screening. The tax authority primarily relies on the TP Catalyst database for transfer pricing audits. This means that TP Catalyst is not only a tool used by major advisory firms, but also an accepted database by the authorities for benchmarking purposes.

In non-calendar fiscal year transfer pricing analysis, year-end adjustments (e.g., reaching the lower quartile through additional invoicing) must be prepared and documented in the same way as for calendar year taxpayers.

Practical examples

Example 1: Manufacturing company (June 30 year-end)

A Hungarian automotive supplier operates with a financial year of July 1 – June 30. The transfer pricing documentation for the period July 1, 2024 – June 30, 2025 is due by November 30, 2025. During the preparation of the financial statements, the company must also decide whether year-end adjustments should be recorded in accounting.

It is worth noting that in recent years more transfer pricing adjustment cases have reached the Court of Justice of the European Union (CJEU), drawing attention to VAT implications as well. The latest CJEU decision, Case C-726/23 involving S.C. Arcomet Towercranes SRL (Romania), addressed the relationship between VAT and transfer pricing adjustments.

Example 2: IT service center (September 30 year-end)

An SSC applies a financial year of October 1 – September 30. The transfer pricing documentation for the period October 1, 2024 – September 30, 2025 is due by February 28, 2026. This is a typical case of non-calendar fiscal year transfer pricing obligations.

Conclusion

Non-calendar fiscal year transfer pricing obligations require specific timing and careful planning. Strict compliance with deadlines, proper preparation of year-end adjustments (including necessary invoicing) and accurate documentation are key to minimizing tax risks.

From manufacturing to IT and financial services, coordinated management of transfer pricing processes is essential. Benchmark analyses based on reliable databases are critical for identifying comparable independent companies and assessing their financial indicators.

Another important aspect is that VAT treatment during accounting adjustments does not depend on the company’s discretion but on the substantive elements of the adjustment, such as:

• whether it relates to a specific transaction,
• whether it modifies previously agreed prices,
• or whether it is merely a profitability adjustment.

In summary, non-calendar fiscal year transfer pricing is not only about regulatory compliance, but also about proactive tax planning. Companies that prepare in advance, ensure accurate documentation and involve experts will not only avoid penalties, but also strengthen their long-term financial stability.

Köő-Tóth Zénó

Senior Transfer pricing Specialist | Accace Hungary

Get in touch with us