2025-12-03
The Ministry of National Economy has published the draft of a new decree on transfer pricing documentation and transfer pricing data disclosure, which would significantly revise the current transfer pricing documentation requirements, introducing substantial additional expectations and certain simplifications in specific areas. The aim is to reduce administrative burdens, align with the OECD Transfer Pricing Guidelines, and increase the efficiency of tax audits.
Below we summarize the most important changes and their expected impact on transfer pricing documentation:
1. Changes in thresholds (Master File, Local File)
The documentation will continue to consist of a Master File and a Local File. However, the Master File will only be mandatory if the total value of related party transactions exceeds HUF 500 million.
The exemption threshold for the Local File and data reporting will increase from HUF 100 million to HUF 150 million; however, the aggregation of similar transactions will be mandatory when determining the threshold.
2. Demonstration of the benefits of received services
For all financial and non-financial services received, the application of the benefit test will be mandatory, and a deeper justification of business rationale will be required for central and management services.
For transactions involving intangibles, it will become mandatory to provide a detailed description of the development, enhancement, maintenance, protection and exploitation of the intangible asset in the economic analysis. The functional analysis must be performed using the five comparability criteria: [CL1] [MG2] contracts; functions performed; characteristics of products, goods, and services; examination of the relevant market; and the strategy pursued by the parties.
3. Low value-adding intra-group services
Based on OECD Transfer Pricing Guidelines, the new decree redefines the concept of low value-adding intra-group services and introduces a simplified regulation. Under the new rules and subject to certain additional conditions, a minimum mark-up of 5% for provided services and a maximum mark-up of 5% for received services would allow for simplified documentation.
4. Database searches and benchmarking studies
Market benchmarking analyses (database searches) will become more standardized, since the decree specifies a series of mandatory steps to be followed. The new territorial restrictions and sample size requirements would further reduce flexibility and may require the preparation of more benchmarking analyses compared to previous years, especially in the case of non-EU related parties.
5. Segmentation
When presenting financial data, it will become mandatory to prepare a segmented statement of operating profit by activity. The allocation must cover all activities, meaning that there can be no unallocated items. If necessary, the segmented statement must also cover certain types of costs and revenues, and the methodology and justification for the allocation must be documented in detail.
Segmentation requires more detailed data, which may result in additional administrative burden, especially for companies with multiple activities, or those operating at a loss.
6. Entry into force
In principle, the new rules are mandatory from the 2026 financial year; however, it is advisable to start preparing for the transformation of documentation and data reporting according to the new requirements as soon as possible in order to ensure that the documentation meets the focus areas of the tax authority’s tax audits.
Summary
Recently, the number and the depth of tax authority audits have increased significantly. The deductibility of central services, the justification of losses and the existence of arm’s length price support have become key audit focus points. Certain provisions of the new decree may result in reduced administration, while others require the provision of additional information, thus aligning documentation rules with the requirements currently expected during tax authority audits.
If you have any questions or would like to consider a high-quality, competitive offer regarding the fulfillment of your documentation obligations, please do not hesitate to contact us. Our colleagues are at your disposal to help you find the solution that best meets your needs.
