Transfer Pricing Documentation and Reporting in the Corporate Income Tax Return – Practical Insights

A new era began in the field of transfer pricing in 2025: the annual corporate income tax return now contains not only financial data but also detailed transfer pricing information. The first year of reporting was 2022, so with the 2025 return (deadline: May 31, 2026), data for three years will already be available. This provides the Hungarian tax authority (NAV) with significant opportunities for risk analysis.

Why is TP data reporting important?

The goal of NAV is not only to identify, during a tax audit, whether the pricing of related-party transactions was well founded, but also to detect potential risks directly from the tax return. Transfer pricing reporting constitutes a dataset that enables the authority to quickly identify patterns, discrepancies, and outliers. The more years of data are available, the easier it becomes to perform comparisons—whether along industry benchmarks or within corporate group trends—and the more targeted audits can become.

What needs to be submitted in transfer pricing reporting?

As part of the corporate income tax return, taxpayers can no longer think in aggregated terms: the reporting requires key information on a transaction-by-transaction basis. In practice, this means that each related-party transaction must be supported with both its underlying logic and figures—the tax return must tell the same story as the transfer pricing documentation.

• Identification data of the related party must be provided for each transaction.
• The applied transfer pricing method must be stated (with a brief justification).
• Profitability indicators must be presented (broken down into components relevant for comparability).
• It must be indicated whether a tax base adjustment was made (and if so, in which direction and in what amount).

At the same time, the reporting does not replace transfer pricing documentation. Experience shows that inconsistencies not only raise questions but may also trigger risk signals in NAV’s systems. Therefore, it is advisable to align the preparation of the tax return with the logic of the documentation.

Typical errors in transfer pricing reporting

The following issues occur particularly frequently—and are typically among the first to be examined during an audit:

• Incomplete or inaccurate NACE (TEÁOR) classification, which can distort industry comparisons.
• Overly general or inconsistent methodological descriptions (e.g. the justification for the selected method does not align with the transaction).
• Missing, late, or incorrectly determined tax base adjustments.
• Improper identification of related-party relationships (e.g. changes during the year, ignoring indirect relationships).

How to prepare for transfer pricing audits

The good news is that most risks can be managed. If the reporting and the documentation are based on the same source and follow the same logic, they provide a transparent and defensible picture of the company’s transactions.

• Start during the year: it is advisable to prepare preliminary transfer pricing records and identify, already in the process, which transactions will be subject to reporting.
• Automate data collection and reporting: it is worth aligning general ledger/controlling breakdowns with the reporting structure so that figures can be traced back.
• Perform reconciliation before submission: verify that the terminology of methods, indicators, and transaction types in the tax return matches those used in the documentation.
• Establish clear internal responsibilities: define who provides the data, who validates it, and who approves the reporting (especially within group structures).

In summary, transfer pricing reporting is not merely an administrative task—it provides NAV with a structured “picture” of related-party transactions. If this picture is consistent, substantiated, and prepared on time, audit risks can be significantly reduced, and responses to potential inquiries can be faster and more confident.