Hungary has issued Decree No. 45/2025 revising transfer pricing documentation thresholds, simplified documentation rules, and benchmarking requirements, with mandatory application from the 2025 fiscal year.
Hungary has adopted revised transfer pricing documentation rules under Decree No. 45/2025, published in the Official Gazette on 23 December 2025.
The revised rules will require taxpayers to reassess their compliance approach ahead of the 2026 fiscal year.
Scope and application
The new regulation reshapes Hungary’s domestic transfer pricing documentation framework, affecting documentation thresholds, eligible transactions, benchmarking requirements, and procedural rules. Taxpayers are advised to review their documentation processes in advance of the mandatory application.
Documentation thresholds
The annual transaction threshold for preparing a Local File has been increased from HUF 100 million to HUF 150 million. A new threshold applies to the Master File: taxpayers are required to prepare a Master File only if the total value of transactions subject to the Local File obligation exceeds HUF 500 million in a tax year. This modifies the previous approach, under which a Master File was generally required whenever transfer pricing documentation was prepared.
Simplified documentation and low value-added services
The decree revises the rules for simplified Local File documentation. For low value-added services, the acceptable markup is now fixed at 5%, replacing the former range of 3% to 7%. A minimum 5% markup must be applied for services provided, while a maximum 5% markup applies to services received, in both cases supported by cost calculations. If these conditions are not met, full transfer pricing documentation is required.
The scope of transactions eligible for simplified documentation has been expanded to include free cash transfers and intermediary transactions where the taxpayer performs no substantive functions. However, the previous exemption for gratuitous cash transfers has been removed, meaning such transactions now require a transfer pricing analysis and documentation, which may be prepared in simplified form if the conditions are satisfied.
Master File requirements
While the general rule that a Master File is required where transfer pricing documentation is prepared remains in place, companies whose total value of related-party transactions does not exceed HUF 500 million in a tax year are exempt from preparing a Master File under the new decree.
Local File content and DEMPE analysis
For transactions involving intangible assets, the Local File must now include more detailed information on DEMPE (Development, Enhancement, Maintenance, Protection, and Exploitation) functions. This enhances the analytical depth required for intangibles-related transactions.
Benchmark studies and comparability rules
The decree introduces clearer and stricter rules for benchmark studies. Comparable companies must be individually identifiable, independent, and active, with financial data available for the three years preceding the year under review. Companies reporting losses in two consecutive years, or negative operating results in more than half of the years considered, must be excluded. Filtering should primarily rely on primary activity (NACE) codes, and comparability must also be assessed using publicly available information.
Geographic hierarchy for comparables
Where the tested party carries out its activities in Hungary, a mandatory hierarchy applies to the geographic search for comparables. The search must proceed in the following order: Hungary; the Czech Republic, Poland, and Slovakia; Bulgaria, Estonia, Croatia, Latvia, Lithuania, Romania, and Slovenia; the European Union; and finally another area that is most suitable for the related-party transaction.
Procedural and formal changes
Transfer pricing documentation and supporting documents may be prepared in Hungarian, English, or German; French is no longer permitted. Documentation may be corrected up until the start of a tax audit, and this option is not restricted by transfer pricing compliance reviews. The decree also clarifies that a related-party transaction may exist with a natural person and that the assessment of such transactions is based on actual economic substance, even where arrangements are agreed orally or implied by conduct without invoicing.
The decree replaces Decree No. 32/2017 and will enter into force on 23 January 2026. It applies mandatorily from the 2026 fiscal year, with an option for taxpayers to apply the new rules to the 2025 fiscal year.
Earlier, the Hungarian Ministry of Finance published Decree 27/2022 (XII.28) which amends the Decree 32/2017 (X.18) on the documentation requirement related to the determination of arm’s length prices on 28 December 2022.
