Transfer Pricing Services in Hungary

Every company in Hungary that is not a small or micro enterprise must price its related-party transactions at arm's length and document them by the corporate income tax deadline. From the 2026 tax year, Decree 45/2025 (XII. 23.) NGM sets new thresholds and stricter content rules. BDO Hungary's transfer pricing team supports international groups with Hungarian local files, benchmarks, data reporting and tax audits.

What is transfer pricing, and who must comply in Hungary?

Transfer prices are the prices applied in transactions between related parties, such as a Hungarian subsidiary and its parent or sister companies. Since 1992, the Hungarian Corporate Tax Act has required these prices to follow the arm's length principle, in line with the OECD Transfer Pricing Guidelines. The price must match what independent parties would agree under comparable conditions.

Two obligations follow from this rule:

• Documentation (transfer pricing records): a Local File per transaction or per aggregated group of transactions, and in larger cases a Master File on the group. The files do not have to be filed with the tax authority, but they must be ready by the corporate income tax return deadline (31 May for calendar-year taxpayers).
• Data reporting: a transfer pricing data sheet in the annual corporate income tax return.

Small and micro enterprises are exempt from the documentation obligation. A Hungarian company's foreign permanent establishment and its Hungarian head office also count as related parties.

What changed with Decree 45/2025 in 2026?

Decree 45/2025 (XII. 23.) NGM on transfer pricing records and data reporting replaced Decree 32/2017 on 23 January 2026. It applies mandatorily from the 2026 tax year. For the 2025 tax year, taxpayers may already apply it to individual Local Files. The new decree raises some thresholds, but it also asks for considerably more detail.

In short: a Local File is needed above HUF 150 million per transaction and a Master File above HUF 500 million in total. Between HUF 100 and 150 million, only data reporting applies. Pass-through recharges are exempt up to HUF 500 million. A simplified file is available for low value-adding services, free transfers of funds and pass-through recharges. Files can be prepared in Hungarian, English or German, must be kept for 8 years, and the benchmark search must be renewed every 3 years.

The content requirements have become stricter at the same time:

• Benefit test: for intra-group services received, the Hungarian entity must show that the service was needed and that an independent party would have paid for it, or would have performed it in-house.
• Segmentation: where company-level figures are not suitable, profit and loss items must be split between related-party and third-party segments, with no amount left unallocated. The figures must be traceable to the accounting system.
• Five comparability factors and DEMPE: the economic analysis must address all five OECD comparability factors. Transactions involving intangibles must be analysed under the DEMPE framework.
• Aggregation limits: transactions cannot be aggregated across manufacturing, distribution, services, financial transactions and intangibles. Purchases and sales also cannot be combined.
• Regional benchmarks: for a tested party operating in Hungary, the search starts with Hungarian companies. It widens to the Czech Republic, Poland and Slovakia, then to other CEE countries, and only then to the whole EU.

Is a Local File prepared by the group enough?

A group-prepared Local File can be a good starting point, but it rarely meets Hungarian requirements without local adjustment. Group templates are usually built for many countries at once. As a result, they often miss the points the Hungarian decree checks explicitly: the benefit test, segmented and traceable financials, the Hungary-first benchmark order, and the link between the Local File and the data reported in the tax return.

In short: in-house preparation needs TP expertise and database access. A group file used without changes risks missing Hungarian content. A group file reviewed locally combines the group policy with Hungarian requirements. Full local preparation suits companies with several documented transactions or an expected audit.

As a rule of thumb, it is worth reviewing the group file locally if any transaction exceeds HUF 150 million, if the Hungarian entity receives management or IT services from the group, or if the company acts as a contract manufacturer or limited-risk distributor for the group. In these cases, the right choice depends on the group's existing documentation and on internal capacity.

How does the annual transfer pricing cycle work?

For a calendar-year company, the transfer pricing work for one tax year falls mostly between January and the end of May of the following year. A typical cycle has five steps:

• Mapping: list all related-party transactions of the year, aggregate them where the rules allow, and test them against the HUF 100, 150 and 500 million thresholds.
• Data collection: gather contracts, invoices and segmented financials. Under Decree 45/2025, related parties abroad may also need to provide detailed financial data, so it is worth requesting it from the group early.
• Economic analysis: update the financials of the comparables every year, and run a new database search at least every three years or when the business changes materially.
• Documentation: prepare or update the Local Files (and the Master File, if required) by the corporate income tax deadline.
• Reporting: complete the transfer pricing data sheet in the corporate income tax return, keeping the reported data consistent with the Local Files.

If a price turns out to fall outside the arm's length range at year end, the adjustment belongs in the same tax year. This is one more reason to check the profit levels before the books are closed.

What happens if documentation is missing or incorrect?

Missing or deficient transfer pricing records can lead to a default penalty of up to HUF 5 million per record, or up to HUF 10 million for repeated failure. The larger risk is usually a tax base adjustment. If the price falls outside the arm's length (interquartile) range, the profit before tax must as a rule be adjusted to the median of the range, not to its nearest end. Tax shortfall penalties and late payment interest may come on top of the adjustment.

The National Tax and Customs Administration (NAV) also checks transfer pricing more often. Since 1 January 2025, it can examine transfer pricing records and data reporting within compliance verification audits. As a result, gaps can surface outside a full tax audit as well. Groups with consolidated revenue above EUR 750 million also have country-by-country reporting (CbCR) duties, where failures can lead to a penalty of up to HUF 20 million.

Transfer pricing services of BDO Hungary

The transfer pricing team of BDO Hungary supports companies across the full transfer pricing cycle:

• Scoping: identifying related parties, determining company size, mapping transactions against the 2026 thresholds, and filing related-party notifications.
• Documentation: preparing, reviewing and localising Master Files and Local Files, including simplified Local Files and benefit test documentation.
• Economic analysis: functional and value chain analyses, and benchmark studies based on international databases that follow the regional order of Decree 45/2025.
• Pricing and policy: setting and reviewing transfer prices, intercompany agreements, and pricing for intangibles and financial transactions (intra-group loans, cash pooling, guarantees).
• Data reporting and CbCR: completing the transfer pricing data sheet of the corporate income tax return, and preparing country-by-country reports and notifications.
• Disputes and certainty: preparing for Advance Pricing Agreements (APA) and taking part in the procedure, and supporting companies in NAV audits through the tax representation services of BDO Hungary.

For data collection, BDO Hungary also offers a digital tool, the BDO Transfer Pricing Questionnaire. Related topics such as permanent establishments, CFC rules or group restructuring are covered by the international tax team.

Frequently asked questions about transfer pricing in Hungary

When is the transfer pricing documentation due in Hungary?

The documentation must be ready by the deadline of the corporate income tax return for the tax year, which is 31 May of the following year for calendar-year taxpayers. It is not filed with the return, but it must be available if the tax authority requests it.

Do we have to apply Decree 45/2025 for the 2025 tax year?

No. The new decree is mandatory from the 2026 tax year. For 2025, taxpayers may choose it for individual Local Files. Because the choice affects content and thresholds, it is worth assessing it transaction by transaction.

Can the documentation be prepared in English?

Yes. Under Decree 45/2025, transfer pricing records and the supporting documents may be prepared in Hungarian, English or German.

Do intra-group loans and cash pooling need documentation?

Yes, if the arm's length value of the financial transaction exceeds the HUF 150 million threshold. Financial transactions form a separate category and cannot be aggregated with services or goods.

What is transfer pricing, and which rules apply in Hungary?

Transfer pricing means setting arm's length prices for transactions between related parties. In Hungary, the Corporate Tax Act sets the arm's length principle. Decree 45/2025 (XII. 23.) NGM sets the documentation and data reporting requirements from the 2026 tax year.

Which firms provide transfer pricing documentation services in Hungary?

Several international advisory networks provide transfer pricing documentation in Hungary, including BDO Hungary. When choosing a provider, it is worth checking experience with Hungarian Local Files under Decree 45/2025, access to regional benchmark databases, and support in NAV audits.

Who can support a company in a NAV transfer pricing audit?

Tax advisors and tax lawyers can represent a company before NAV. BDO Hungary supports companies in transfer pricing audits, from reviewing the documentation to communicating with the tax authority.