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Change in the documentation requirements for transfer pricing

Published on 21.02.2023 / reading time approx. 2,5 minutes

The amendment of Decree No. 32/2017 (X. 18.) of the Ministry of National Economy on the Documentation Requirements Pertaining to Determining the Arm’s-Length Price was published on 28 December 2022. Please find below the most significant changes.

New value limit of 100 million HUF

From the 2022 tax year, the exemption limit of the documentation requirement for intra-group business relationships increases from the previous 50 million HUF to 100 million HUF.

New data service obligation

According to the amendment to the Hungarian Corporate Income Tax Act, taxpayers are obliged to provide transfer price-related data in their tax returns. The detailed regulations were included in the amended Transfer Pricing Decree.

The amended regulation classifies intra-group transactions as follows:

a) Transactions exempt from data transfer:
  • transactions not exceeding one hundred million HUF at arm´s-lenght price,
  • Stock-exchange transactions according to the Capital Markets Act and
  • transactions carried out at a fixed price set by any competent authority.

b) Transactions with a limited data transmission obligation:
  • transactions concluded on the basis of a contract with a private person who is not an private entrepreneur,
  • the recharge of independent third party costs and service fees in an unchanged amount or value, and
  • liquid assets transferred or received without consideration.

c) Transactions subject to comprehensive data transfer:
  • all transactions that do not belong to the above exempted or excluded business relationships, including transactions for which a resolution decision has been issued in an advanced pricing agreement procedure.

In the case of corporation tax returns submitted after December 31, 2022, there is an obligation to transmit data.

If there exists a limited obligation to transmit data, taxpayers must provide information on points 1 to 5 below. In the case of a comprehensive obligation, information on all the 10 points listed must be provided.

Details for exempted and full disclosure transactions:
  • Designation of the transaction (to be selected from the list in the decree).
  • Specification of the most typical activity code (NACE code) of the transaction.
  • Tax number and tax residency of the related parties involved in the transaction.
  • The net value of the transaction determined in HUF per related transaction.
  • Tax base adjustment value per related transaction (if any).

For transactions over HUF 100 million additionally:
  • Method chosen to determine the arm´s-length price of related party transaction.
  • Depending on the type of transaction, provide transaction-specific information (e.g. profitability indicator, interest rate).
  • Disclosure of the accounting standard used.
  • The value or range of the arm´s-length price for the transaction.
  • The value of the transaction, taking into account any tax base adjustments made, expressed in the unit specific to the transaction (e.g. profitability index).

Value of penalties

In addition to complying with the previous legal regulations, there is an additional obligation for companies to provide further information which must be taken into account when completing the annual tax return. As before, the Master File and the Local File together form one documentation, and in tax year 2023 the Master File and the Local File continue to form the two parts of the transfer pricing documentation, with the local documentation consisting of a general and the transaction-specific parts.

Penalties for non-compliance with the documentation obligation can not only be imposed once per tax year, but - as before - several times per transaction documentation. The previous default penalty of up to HUF 2 million per transaction has been increased to HUF 5 million, and in case of repeated default, the default penalty has been increased from HUF 4 million to HUF 10 million per transaction.

Using of interquartile range

According to the previous regulation, if the assessment basis had to be adjusted, it was sufficient to make the adjustment up to the minimum/maximum value of the arm´s-length price, if the consideration recognized was outside the usual arm´s-length price range. However, according to the new transfer pricing rules, the adjustment to the minimum/maximum value is no longer sufficient and the adjustment must be made to the middle (median) value of the price range.

Accounting derivation of transaction value

According to § 4 (4) n) of the amended transfer pricing regulation, it must be shown which and in what way general ledger accounts, cost units, work/project numbers, allocation keys, etc. can be assigned to the individual transaction.


Taxpayers who are required to keep a transfer pricing documentation must provide detailed transaction information when completing their corporate income tax return, which may make necessary a detailed database analysis. Therefore, the analyses and studies must already be available when filling out the tax return.

The involved foreign group companies should be informed about the local legal requirements in time, as in many cases the Hungarian group company will be the first to provide detailed information to the tax authorities about the group internal businesses.


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