Transfer pricing guidance issued by the Hungarian Ministry of Finance on the new decree

On 9 July 2026, the Hungarian Ministry of Finance published its guidance related to Decree 45/2025 (XII. 23.) NGM on transfer pricing documentation and transfer pricing data reporting. Although the transfer pricing guidance does not qualify as legislation, its importance is nevertheless significant, as it provides navigation on how the Hungarian tax authority interprets and expects the application of the new rules.

The provisions of the new transfer pricing decree must be applied for the first time for tax years beginning in 2026. Although transfer pricing documentations will only be prepared in the following year, it is advisable to start collecting the underlying data, analyses and supporting documents already now.

In this article, we present seven key transfer pricing areas where timely preparation is particularly important.

1. Segmentation: an ongoing task during the year, not a year-end calculation

Perhaps the greatest practical challenge of the new regulation is that the financial data used in transfer pricing analyses must be traceably linked to the company’s accounting system. Accordingly, the connection to:

• general ledger accounts,
• cost centres,
• job numbers,
• or profit centres

must be ensured in a way that allows the Hungarian tax authority to verify the calculations retrospectively.

According to the transfer pricing guidance, it is a fundamental requirement from both a conceptual and practical perspective that profitability ratio and other transfer pricing calculations be based on properly segmented financial data. Accordingly:

• the financial data of the business segment related to the specific controlled transaction must always be used rather than the financial results of the company as a whole;
• when applying certain methods, all revenues and expenses up to operating profit level must be allocated among the individual transaction segments.

The transfer pricing guidance makes it clear that no unallocated item may remain. Consequently, management bonuses or taxes recognised at operating level may not constitute separate categories.

This should be treated as an operational task performed during the tax year. Special attention is required where the tested party is a foreign group member, because obtaining properly segmented financial data remains the responsibility of the Hungarian taxpayer. For this reason, the internal group data reporting process – particularly who provides which data, when and at what level of detail – should be agreed with the affected related parties as early as possible.

2. Benefit test: the evidence is being created now

The benefit test is a new mandatory element of the local file, particularly for the recipient of services. In this context, it must be demonstrated that a service received from a related party – whether financial or non-financial – was genuinely required for the recipient’s business activities and that an independent party would also have been willing to pay for it.

According to the transfer pricing guidance, three facts must be proven:

• the actual provision of the service,
• the existence of a local business need,
• the benefit derived from the service.

The guidance mentions reports, presentations, professional emails, training materials, software usage logs and timesheets among the examples of supporting evidence.

What is not sufficient on its own to substantiate the above:

• the existence of a contract and invoice,
• the fact that the company has used the service for a long time,
• referring to the fact that the service was required by the group headquarters.

Profitability within the arm’s length range does not in itself prove benefit, while loss-making operations – although not automatically excluding it – may call it into question.

The most important message is that the required evidence should be collected continuously throughout the year. In many cases, missing documentation cannot be recreated afterwards.

3. Indirect related-party chains: mapping the ownership structure

In the future, the local file will need to present not only the identification data of the related party and the legal basis of the relationship. In the case of indirect controlling influence, intermediate persons and the nature and extent of their influence must also be disclosed.

According to the transfer pricing guidance, this is particularly important in cases involving adjustments that reduce the Hungarian tax base, as the tax authority must be able to verify that the parties qualify as related parties under Hungarian rules.

For multi-tier international structures, this typically requires:

• a complete mapping of ownership chains,
• identification of foreign intermediate entities,
• documentation of the nature and extent of influence in those foreign intermediate entities.

As this information is often not readily available to the Hungarian subsidiary, obtaining it requires group-level coordination. Keeping corporate structure documentation up to date is therefore an important part of the preparation process.

4. Transactions without invoices and free-of-charge transactions: the importance of transaction mapping beyond accounting records

The new regulation expressly states that a related-party transaction may exist even without invoicing. The transfer pricing guidance adds that reviewing invoices and accounting entries alone is not sufficient to identify transactions.

An important change is that free transfers and receipts of funds will no longer be exempt from documentation requirements from 2026 onwards. The transfer pricing guidance also highlights the risk of recharacterisation: a cash movement may in fact form part of another transaction, such as a year-end profitability adjustment.

Therefore, an underpriced or free-of-charge transaction is not automatically exempt from transfer pricing obligations. In the case of loan transactions, the amount of interest, rather than the principal amount, remains the relevant figure to consider. For these reasons, it is advisable to prepare a comprehensive transaction map and to document in writing the agreements concluded verbally or through implied conduct.

5. Benchmark analysis: group-level studies may not be sufficient

The new transfer pricing regulation specifies the minimum requirements for benchmark studies, including several Hungarian regulatory particularities. For example, the transfer pricing guidance highlights that pan-European benchmarking studies frequently used by multinational groups often do not comply with Hungarian requirements. Existing benchmarks should therefore be reviewed in due time and adjusted to Hungarian regulations where necessary.

6. DEMPE analysis: a new expectation for intangible assets

Where a transaction involves a unique and valuable intangible asset, the local file must present the DEMPE functions. This means identifying the parties responsible for:

• development,
• enhancement,
• maintenance,
• protection,
• and exploitation

of the asset.

Under transfer pricing rules, the concept is broader than the accounting approach: know-how or trademarks not recognised in the books may also fall within its scope. It is therefore advisable to identify the relevant intangible assets now.

7. Low value-adding services and changing exemptions

The definition of low value-adding services has been revised and is now based on substantive criteria. The TESZOR classification list has been eliminated, meaning that even the core activity of a shared service centre may fall into this category.

A 5% net mark-up may be accepted without additional support under certain conditions; however, the benefit test remains mandatory for low value-adding services as well.

The exemption rules have also been amended:

• cost recharges are exempt from transfer pricing documentation requirements only up to HUF 500 million;
• exchange-traded and officially priced transactions above this threshold are subject to partial reporting requirements.

Why can’t preparation wait?

A common feature of the new Hungarian transfer pricing rules is that compliance is determined not when the documentation is prepared, but during day-to-day operations throughout the year. Properly segmented financial data, documentation supporting the benefit test and comprehensive transaction identification can only be reconstructed afterwards with significant effort – or sometimes not at all.

As the 2026 tax year is already subject to the new rules and the Hungarian tax authority is placing increasing emphasis on the substantive quality of transfer pricing documentation, it is worth taking the following steps already this year:

• review related-party transactions,
• assess the segmentation capabilities of the accounting system,
• assign responsibilities,
• initiate discussions with the relevant group entities.

Companies that prepare in time will be able to build their local file for the 2026 tax year on properly substantiated and audit-ready information rather than on incomplete data.

The transfer pricing consulting team of WTS Klient Hungary has extensive experience in interpreting transfer pricing regulations and preparing documentation. We are ready to assist clients in assessing how the Hungarian transfer pricing decree 2026 and the transfer pricing guidance of the ministry will affect their company. As a member of the WTS Global transfer pricing consulting team, we also offer solutions for all transfer pricing-related issues at an international level. Feel free to contact our experts!