Hungary’s domestic transfer pricing framework took a major step forward in early 2026. Decree No. 45/2025 (XII. 23.) of the Ministry for National Economy (NGM), promulgated on 23 December 2025 and effective from 23 January 2026, did not merely update the previous rules but materially elevated transfer pricing requirements in Hungary. The legislator’s objective is twofold: to align more closely with the OECD Transfer Pricing Guidelines, while at the same time strengthening scrutiny of the quality and realism of the documentation Hungarian taxpayers use to support their related-party transactions.
A central goal of the new regulation is to increase transparency and enhance the effectiveness of tax authority audits.
From an expert perspective, the changes bring administrative relief in certain areas, while introducing significant substantive tightening in others.
Why was a new decree necessary?
The global tax environment, the evolution of the OECD Transfer Pricing Guidelines, and the Hungarian tax authority’s (NAV) audit experience in recent years all pointed toward the need for Hungarian transfer pricing documentation to better reflect economic reality. Accordingly, Decree 45/2025 is not merely a formal update, but a systemic reform that more deeply links transfer pricing analysis to companies’ actual operations and accounting data.
What changes under the new decree? – A system-level transformation
Decree 45/2025 introduces both sensible simplifications and structural tightening. The focus has shifted from formal compliance toward substantive content, data traceability, and economic rationale.
IMPORTANT: Key changes compared to the draft
The final text promulgated on 23 December 2025 differs from the original draft in two critical respects:
- German language reinstated: Contrary to the draft, the final decree continues to allow documentation to be prepared in German (in addition to Hungarian and English). This can be a major relief for German-headed groups that prepare central documentation in German, as no translation will be required.
- Stricter transitional rules: As a main rule, the new transfer pricing rules will apply to tax years starting in 2026. Based on the draft, it appeared that, by election, the new rules could already be applied to the full transfer pricing documentation for tax years starting in 2025. However, the final decree provides that for the 2025 tax year the Master File must still be prepared under the old decree (Decree 32/2017). The new, value chain-based Master File structure becomes mandatory only for tax years starting in 2026.
1. Exemptions and simplifications: higher thresholds
The new regulation acknowledges the administrative burden of smaller transactions and therefore raises thresholds in several areas:
- HUF 150 million threshold: The documentation and transfer pricing data reporting (ATP) threshold increases from HUF 100 million to HUF 150 million. This provides real relief mainly for lower-volume related-party transactions.
- Low value-adding services (LVAS): The definition is now fully OECD-compliant. If a service meets the functional criteria and the mark-up is exactly 5% (minimum upon provision, maximum upon receipt), several substantive elements—and even the benchmark study—may be omitted.
- Exemption from the Master File: If the value of a taxpayer’s related-party transactions subject to documentation does not exceed HUF 500 million within a tax year, the Hungarian taxpayer is exempt from preparing the Master File.
2. Administrative framework: language and amendments
- Language: Documentation may be prepared in Hungarian, English or German. (German and French were missing from the draft, but German was reinstated in the final version.)
- Amendability: The documentation may be amended until the commencement of a tax audit, and this possibility is not restricted by a compliance review (jogkövetési vizsgálat).
3. Tight integration of the Local File and transfer pricing data reporting (ATP)
From now on, transfer pricing data reporting is a direct “mirror image” of the Local File:
- Data harmonisation: The Local File must include the exact transaction descriptions used in the ATP forms, as well as the relevant TEÁOR codes.
- Characterisation: It is mandatory to record the functional profile of the parties (e.g., toll manufacturer/contract manufacturer, full-risk distributor), which fundamentally determines the choice of transfer pricing method.
4. Stricter aggregation rules and narrowing exemptions
- Prohibition of aggregation: The new legislation categorically prohibits aggregating five main activity types with each other (manufacturing, distribution, services, finance, intangibles).
- Free-of-charge cash movements: The full exemption has been abolished; funds transferred free of charge now require (simplified) documentation.
- Cost recharges: Above a transaction value of HUF 500 million, the exemption for pass-through charges recharged at an unchanged amount ceases to apply.
5. The biggest challenge: accounting segmentation
The deepest change in the new decree concerns traceability of financial data:
- EBIT-level segmentation: Revenues and costs related to controlled transactions must be segmented at the operating profit (EBIT) level. An important rule is that after allocation there may be no “unallocated” operating items remaining. If the tested party is the taxpayer’s foreign related entity, segmentation must also be prepared for that foreign related party.
- Data traceability: A direct link must be ensured between transfer pricing calculations and the company’s accounting information system (general ledger).
6. Substantive and methodological tightening
- DEMPE analysis: For intangibles, it is mandatory to present the development, enhancement, maintenance, protection and exploitation functions.
- Benefit test: For services (including financial services), it must be evidenced that the service receipt generated a real economic benefit for the taxpayer.
- Stricter benchmarking: Loss-making companies must be excluded from the sample, and a strict geographical hierarchy must be followed (HU – V4 – Central and Eastern Europe – EU27).
The 2025 transfer pricing dilemma
For companies, the biggest question now is how to treat the 2025 tax year. Under the new decree, the Local File may already be prepared for 2025 under the new rules (optionally), while the Master File must remain in the old structure—meaning companies will need hybrid solutions. The safest approach is to start aligning substantively with the new expectations already now (e.g., segmentation, DEMPE), while still keeping the old rules in mind for 2025 regarding exemptions, data reporting, and the Master File. This is particularly important because the legislation does not provide transitional provisions for the Local File with respect to data reporting.
