Preparing for the new TP changes – Part 2

The new transfer pricing decree issued by the Ministry for National Economy has entered into force, bringing significant changes to documentation and administrative requirements. The aim of the new regulation is to reduce administrative burdens, curb tax avoidance, and support tax audits. Due to the increasing penalty risks observed in recent years, the new rules once again highlight the importance of transfer pricing compliance. For companies, a comprehensive review of their current documentation practices and alignment with the new requirements has become practically unavoidable. The provisions of the decree apply from tax years starting in 2026, yet taxpayers may opt to follow the new rules already for the 2025 financial year.

Follow our updates to stay informed about the most important steps and guidance — we help you navigate the changes and prepare for the necessary actions.

In the previous part of our series, we summarized the key aspects of the benefit test. In this section, we focus on the importance of establishing effective information flows between related parties and highlight the most important new elements to keep in mind.

Focus on Intra‑Group Communication

The new Hungarian transfer pricing regulation significantly tightens and clarifies documentation requirements in several areas. One of the most important changes is that numerous data points and pieces of information have become mandatory elements of the documentation — many of which Hungarian entities can only obtain from other group members, typically the foreign parent company or other subsidiaries. This means that preparing compliant and timely transfer pricing documentation is no longer solely a local task: it requires group‑level cooperation and smooth information flows.

Majority Control – More Detailed Disclosure Required

Under the new decree, it is no longer sufficient to simply state the existence of a related‑party relationship. If majority control is exercised indirectly, every intermediary person or entity — along with the extent of control — must be documented. This represents a significant additional burden, particularly for large, multi‑tiered corporate groups where multiple holding companies and intermediate entities may be involved. Mapping the full chain of control is essential and, in many cases, only feasible with the involvement of the parent company and the close cooperation of group members operating in different jurisdictions.

Segmented Data and Profitability Indicators – Practical Challenges

The new regulation makes it clear that compliance with the arm’s‑length principle can only be demonstrated on the basis of actual, realized, transaction‑specific segmented financial data. In practice, this poses several challenges. First, producing segmented data is a time‑consuming, complex process that requires coordinated work across multiple departments. Second, the necessary information is often not available at the Hungarian entity but must be obtained from other related parties — frequently from foreign affiliates. The situation is further complicated by the requirement that segmented data must always be produced in accordance with the accounting standards applied in the tested party’s official financial statements. For example, if the tested party in Hungary prepares its financial statements under Hungarian accounting rules, group‑level standards (such as IFRS or US GAAP) cannot be used.

Don’t Let Documentation Be Delayed Due to Missing Information

The new decree is expected to have a significant impact on the daily operations of companies, making early preparation especially important. Without effective and transparent information sharing within the corporate group, transfer pricing documentation can easily become incomplete or inaccurate — creating substantial compliance risks. Since many of the required data points and background information can only be obtained from other group members, it is crucial to request and record these in a timely manner. Otherwise, the necessary information may not be available by the documentation deadline. Ensuring this typically requires conscious planning, pre‑agreed processes, and active cooperation at the group level.