From 2026, transfer pricing documentation for transactions between related entities will be placed on a new foundation, as the new decree on transfer pricing records and transfer pricing data reporting has been published. The objective is twofold: to simplify where possible, while providing deeper substantiation where necessary.
When Does the New Regulation Become Mandatory?
The application of the new decree is mandatory from tax year beginning in 2026. In tax years beginning in 2025, only the content rules of the local file may be chosen, which typically results in "mixed" compliance, because the threshold values and data reporting rules do not necessarily change according to the same logic in that year.
1) The exemption threshold for the local file increases to HUF 150 million
One of the most tangible simplifications is that, as a general rule, no local file needs to be prepared for a given controlled transaction if its value is below HUF 150 million (excluding VAT and calculated at arm’s length price).
When assessing the threshold, transactions that may be aggregated must be considered together.
2) Transfer pricing data reporting may also become “lighter” below HUF 150 million
Under the logic of the decree, transactions below HUF 150 million that are exempt from the local file requirement are also exempt from transfer pricing data reporting. From an administrative perspective, this may result in a noticeable reduction in burden for many companies, but only if the transaction has been classified correctly and the consolidation rules have been properly applied.
3) Master file: only above HUF 500 million
A new feature of the rules is that a master file is required only if the total value of related-party transactions subject to the local documentation requirement exceeds HUF 500 million (excluding VAT and calculated at arm’s length price). This will typically benefit corporate groups with smaller and simpler transactions.
4) Cost recharges: exemption up to HUF 500 million – documentation above that threshold
Cost recharges (re-invoiced costs) have often been regarded as a “simpler” area in the past.
The new decree, however, introduces a separate threshold for such transactions: in certain cases, they may be exempt from the local file requirement up to HUF 500 million, while above that amount a documentation obligation arises.
The good news is that, in specified situations, a simplified local file may still be sufficient. A typical pitfall, however, is where the cost is allocated among several related parties: in such cases, the allocation methodology must also be substantiated on an arm’s length basis.
5) Low value-adding services: a new definition
A significant change is that the scope of low value-adding services no longer depends on a fixed listing (previously based on TESZOR codes), but instead is determined on the basis of a set of conditions. Subject to certain requirements, a simplified local file may be prepared for low value-adding intra-group services where, in the case of services rendered, at least a 5% net mark-up is applied, and in the case of services received, the service provider’s net mark-up does not exceed 5%.
6) Benefit Test: An invoice will not be enough for services
Where a company receives services from a related party, whether financial or non-financial in nature, the new decree requires the local file to present both the business rationale and the benefit test.
In practice, this means that companies should prepare structured supporting documentation that presents the subject and purpose of the service, the business decision or process it supports, the result of the service—such as cost reduction, risk management, revenue increase, compliance advantage, or time savings—and why the use was justified due to competencies not available in-house.
7) Segmentation and internal reporting: for many companies, this will be the real project
The decree provides in several places that the financial data used for the analysis must be reconcilable to the accounting system, and where the use of company-level data is not justified, segment-level data must be applied.
This is not merely a transfer pricing documentation exercise: in many cases, it will also require input from controlling and accounting functions, and may even necessitate ERP or reporting enhancements.
Management Focus Points for Implementing the 2026 Transfer Pricing Decree
- Preparation of an inventory of related party transactions: identification of transaction values, types, directions, related contracts, and business owners.
- Examination of value thresholds and consolidation: review of the applicability of the HUF 150 million and HUF 500 million thresholds, as well as consolidation rules.
- Documentation of service transactions: development of documentation supporting the benefit test.
- Assessment of segment-level data: examination of the availability of financial data assignable to transactions, and if necessary, the method of producing them.
- Conscious decision regarding the 2025 tax year: consideration of whether the preparation of a local file according to the new rule system is proportionate to the related data collection and methodological efforts.
Our Transfer Pricing Advisory Team Is Happy to Help!
The transfer pricing advisory team of ICT Európa Finance Zrt. provides comprehensive support in fulfilling transfer pricing record-keeping obligations effective from 2026, from reviewing related party transactions to preparing documentation.
We assist in interpreting relevant related party transactions and applicable value thresholds, as well as developing the benefit test and related service documentation. We also provide support in assessing segmentation and reporting needs, ensuring that the financial data underlying the records can be properly traced back to the accounting system.
If necessary, we prepare and update the local file as part of the transfer pricing records, as well as the master file when value thresholds are met, contributing to regulatory compliance and reducing tax authority risks.
Author: Emese Vass, Transfer Pricing Expert at ICT Business Advisory Ltd.
Transfer pricing compliance is not a template exercise: every corporate structure is different.
Get in touch with us, and we will propose a tailored solution.
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