On 8 April 2013, the National Tax and Customs Administration (tax authority) issued an interpretative leaflet regarding the application of the arm's length principle (ALP) under a surety agreement. According to the leaflet, in 2010, a Hungarian LLC, a subsidiary and related party of its foreign parent, borrowed money from a bank under a 5-year long agreement. At the same time, the foreign parent of the LLC entered into a surety agreement and made a promise to assume the responsibility for the debt if the LLC defaults. The foreign parent did not charge the LLC under the agreement, and the...