The new transfer pricing decree will become mandatory from 2026, but according to the draft text, companies may already apply it for the 2025 financial year. Although one of the aims of the amendment was to reduce administrative burdens, several local requirements have been tightened and new compliance obligations have also been introduced.
The changes practically affect the entire documentation process: from comparability analyses and segmentation to functional analyses, analyses related to intangible assets, and benefit tests for intra-group services. The tax authority’s earlier – non-binding – expectations now appear at the level of legislation, providing a clearer basis for risk assessment, audits and adjustments. As a result, companies will face less flexibility and more detailed documentation expectations.
Key changes in brief
- Hungary-focused database searches: Local comparability rules will become mandatory. The usability of central, global benchmarks will be significantly restricted. If the documentation does not meet the requirements, the tax authority will prepare its own analysis and use it as the basis during audits.
- Stricter segmentation and financial reconciliation: More detailed calculations linked directly to the financial statements must be presented; segmentation will remain a key audit focus.
- New rules for naming transactions: The transaction names used in the documentation must match those used in the transfer pricing data reporting, and the relevant NACE (TEÁOR) code must also be indicated.
- More detailed requirements for intangible assets: Functions and risks associated with intangible assets must be described at a deeper level.
- Mandatory benefit test: For every intra-group service, companies must demonstrate the economic benefit and how it can be measured.
- New rules for low value-adding services: Previous thresholds and activity restrictions will be removed; simplified documentation may be applied if the mark-up is around 5%.
- Revised thresholds and exemptions: The local file threshold will increase to HUF 150 million; in certain cases the master file may be omitted. Some existing exemptions will, however, be eliminated (e.g., for no-consideration transfers of funds).
- New consolidation rules: Several transaction types can no longer be consolidated (e.g., manufacturing and distribution).
- Updated data reporting structure: Refined categories and stricter alignment with the documentation.
What should be done in time?
- Review existing database searches.
- Revise segmentation methods and financial reconciliations.
- Update functional analyses and prepare analyses on the use of intangible assets.
- Strengthen the documentation of intra-group services.
- Consider applying the new rules already for the 2025 financial year.
- Update transfer pricing processes and internal controls.
Summary
The amendments represent a significant tightening of Hungary’s transfer pricing regulation. More detailed documentation requirements, Hungary-focused benchmarking rules and new functional analysis obligations clearly indicate that the tax authority will rely even more heavily on these tools in future audits. Early preparation and strengthening of transfer pricing processes are therefore essential for companies to manage the newly emerging risks.
