SAC on proving management services within a holding group
In judgment 8 Afs 164/2025-40, the Supreme Administrative Court (SAC) examined how specifically the tax administrator must formulate their doubts and what evidence a taxpayer must provide when claiming costs of services provided within a corporate group structure.
CK Hungariatour s.r.o. claimed payments for management services received from its parent company as deductible expenses for income tax purposes in 2018 to 2020. As evidence, the company submitted mainly contractual documentation for the provision of services, issued invoices and other supporting documents describing the provider’s activities. However, the tax administrator concluded that the company had not proved either that the services had actually been provided or their specific content, and assessed additional corporate income tax, including a penalty.
The company argued that the services had been provided within the holding group and that their economic benefit followed from the very existence of group cooperation and could not always be expressed through individual outputs or separate documents. In its view, the tax administrator required an unreasonably high standard of proof and had not substantiated its doubts sufficiently.
Assessment by the SAC
The SAC recalled that the taxpayer bears the burden of proof for facts they themselves assert and record in their accounting books. However, formally correct accounting documents may not in themselves be sufficient if the tax administrator identifies specific doubts as to the credibility, completeness or provability of the declared supply. The tax administrator does not always have to prove that the supply did not take place at all. However, they must specify their doubts sufficiently and allow the taxpayer to respond to them. Formulating merely general doubts regarding the expenses claimed, i.e. on the grounds that they involve services between related parties, is not sufficient. Only when the tax administrator has properly expressed (formulated) their doubts, is the taxpayer required to prove the actual content, scope and economic benefit of the declared services.
The court emphasised that, from an evidentiary perspective, the provision of services between related parties does not enjoy any privileged regime. On the contrary, companies within the same holding group can be expected to be better able to document the content and scope of services provided to each other than independent entities.
The SAC ultimately dismissed the cassation complaint and upheld the regional court’s decision, although it did not agree with part of its reasoning. At the same time, it clarified the rules on the allocation of the burden of proof in tax proceedings.
Practical implications
The decision is significant primarily for groups of companies that use centrally provided services, such as group management, finance, IT, HR or strategic advisory services. As a rule, a contract and an invoice alone are not sufficient for the expenses to be recognised for income tax purposes.
The judgment confirms the long-standing approach of administrative courts to proving services between related parties. Companies should pay increased attention to ongoing documentation of management, advisory or similar intra-group services. The absence of specific evidence of the content and scope of the supplies may result in the related expenses not being recognised for tax purposes.
From the tax administrator’s perspective, the key issue will be whether the documentation allows it to verify retrospectively what exactly was delivered, who used the service and why it was economically necessary for the company concerned. The mere existence of a group relationship or regular monthly invoicing without further documentation may be insufficient in a tax inspection.