What is transfer pricing and why is it a key issue in 2026?

Transfer pricing is not only an administrative obligation – but also a strategic tool that can carry a significant tax risk. In 2026, the role of transfer pricing becomes even more pronounced in the light of the new transfer pricing regulation, HTCA audits, the global minimum tax and digitalisation.

What is transfer pricing?

Transfer pricing is the price that related parties apply to each other when exchanging goods, services or intangible assets. Because these companies are economically intertwined, the prices they charge may differ from market conditions – and this is of paramount importance from a tax perspective.

Example: If a Hungarian subsidiary provides software development services to a German parent company, the fee for the service must be determined at arm’s length in transfer pricing – such as if the transaction were between independent parties.

Why is transfer pricing important from the point of view of the National Tax and Customs Authority?

Transfer pricing has a direct impact on the tax base. If a company applies an artificially low or high price, it may constitute tax evasion – which is why the HTCA examines these transactions with special attention.

Focal points of the tax audits in transfer pricing:

• Existence and quality of transfer pricing documentation
• Benchmark analysis (market price support)
• Justification of services and fees between related parties

Related companies – who does the transfer pricing regulation apply to?

Transfer pricing regulation applies to related parties that have a controllability, ownership or personal concentration between them.

Typical connections:

• Parent company and subsidiary
• Sister companies (joint owner)
• Joint management or decision-making

Important: Internationally, even a 25% ownership stake or a joint management can result in a related party relationship, while in Hungary this enters over 50%. At the same time, the rules related to joint management are stricter in Hungary than they are internationally accustomed.

Why is transfer pricing a key issue in 2026?

 1.  New regulations and global trends

• Due to the introduction of the global minimum tax (GloBE), the role of transfer pricing in tax planning will increase.
• Due to the tightening of the OECD guidelines, the documentation requirements are also increasing.
• In addition, domestic regulation has also become stricter, and although the new transfer pricing decree that comes into force in 2026 has also brought administrative relief, it requires much more conscious and substantiated transfer pricing from obligors.
• In order to protect the domestic tax base and budget revenues, Hungarian legislation interprets transfer pricing as a strategic area.

2. Increasing tax audits

• In 2026, the HTCA continues to focus on transfer pricing, for which the annual transfer pricing data reporting that have been running since 2022 now provide structured, industry- and activity-breakdown risk analysis data and results.

Based on the 2026 tax audit plan of the National Tax and Customs Authority, the following areas can expect targeted tax audits:

• risky domestic and cross-border transfer pricing transactions, which are selected based on domestic transfer pricing reporting and country-by-country reports (CbCR)
• taxpayers who have not fulfilled or submitted incomplete/incorrect transfer pricing data reporting in their corporate income tax returns
• transactions involving intangible assets by related parties
• credit or other financial transactions between related parties
• taxpayers engaged in manufacturing activities within a group of companies that make a loss or achieve very low profits
• taxpayers engaged in agency, commission or distribution activities within a group of companies, making losses or achieving very low profits
• related pharmaceutical companies
• related food companies
• affiliated construction companies
• affiliated automotive companies
• furthermore, those who have an APA decision can also expect that the HTCA will explicitly check the fulfilment of the conditions set out in the decision setting the arm’s length price.

Practical transfer pricing advice for businesses:

Check

if you have affiliates categorized as related parties under Hungarian law!

Prepare transfer pricing documentation

for all relevant transaction!

Use benchmark analysis

to support market price!

Consult an expert

if you are unsure about regulations or documentation!