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Obligations related to the global minimum tax (Pillar 2) are gaining momentum again in 2026. Although the regulation is already known to companies, the upcoming deadlines and administrative requirements have in many cases not yet become routine for Hungarian group entities.
Notifications and returns
For taxpayers with a calendar financial year, the first important step is the notification related to the expected tax liability, the deadline of which is 28 February 2026, which may already be familiar from last year; however, the submission deadline has been extended by two months.
This is followed by the GLoBE returns and advance payment obligations, which require not only technical administration but also preliminary data collection, group-level coordination, as well as local-level calculations:
- 30 June 2026: submission of the GLoBE return for the 2024 year (end of the 18th month following the tax year)
- 20 November 2026: submission of the GLoBE advance return for the 2025 year (20th day of the 11th month following the tax year)
Data collection challenges
The notification obligation itself does not depend on whether an actual top-up tax payment obligation arises; however, the intention to apply possible reliefs must already be indicated at this stage. Therefore, it is particularly important to clarify in time which entities fall within the scope of the regulation and who is responsible within the group for fulfilling the individual obligations. The notifications may require several types of information — particularly regarding parent and sister company obligations — the collection of which in practice may be more time-consuming than expected.
International background
The international regulatory environment continues to be refinedbased on OECD guidance and technical clarifications. These changes should also appear in the Hungarian legislation in the near future; therefore, up-to-date monitoring and early planning are increasingly key for companies.
Compliance with the global minimum tax is a process, not a one-off task
In relation to the global minimum tax, it is now clearly visible that compliance is not a one-time filing task but a continuously developing process. In the initial period, most companies focused on deadlines; the next step, however, is rather to ensure that group-level data, decisions and responsibilities are established in a stable manner.
Based on experience, the highest risk is not the lack of knowledge of the legislation, but when the necessary information only starts to come together close to the deadlines. Those who begin structured preparation in time can not only simplify administration but also significantly reduce the uncertainty of later accounting and tax decisions.
Practical interpretation of Decree No. 45/2025 (XII. 23.) of the Minister for National Economy
In our previous newsletter, we outlined the legislative changes affecting the accounting treatment of transfer pricing adjustments. In this article, we provide a more detailed overview of the key provisions of Decree No. 45/2025 (XII. 23.) of the Minister for National Economy, promulgated on 23 December 2025, which significantly revises the content and formal requirements of transfer pricing documentation.
The new rules must be applied mandatorily to tax years starting in 2026. At the same time, taxpayers may decide to apply the new provisions already to the local file for tax years starting in 2025. In such cases, however, the master file remains subject to the previous regulation, namely Decree No. 32/2017 (X. 18.) of the Minister for National Economy. The choice of timing requires careful preparation, given the increased level of detail and the objectives of the new requirements.
Purpose of the changes
The aim of the new decree is to enhance transparency, align Hungarian practice more closely with international transfer pricing standards, and support tax authority audits. To achieve this, the documentation requirements are more closely linked to transfer pricing data reporting and require more detailed analyses in several areas.
Why preparation is essential
The transition will involve additional administrative efforts and a review of existing documentation processes, particularly in the first year of application. The new regulation introduces several changes that affect the application of exemptions, the depth of analyses, and the preparation of underlying data.
Key changes introduced by the decree
The documentation exemption thresholds are revised. A threshold of HUF 500 million is introduced for the master file and HUF 150 million for the local file, while the full exemption previously available for cost recharges is abolished.
The scope of mandatory documentation elements is also expanded. Detailed transaction characterisation becomes required, together with a benefit test for services and a DEMPE analysis for intangible assets. In addition, database screening rules are tightened, and the preparation of segmented profit and loss statements distinguishing between related-party and third-party transactions becomes mandatory.
The decree also clarifies the practical application of the concept of related-party transactions. A related-party transaction may exist even in the absence of invoicing and may also arise in relation to transactions with natural persons. Requirements regarding the language and retention of documentation are tightened as well: documentation may only be prepared in Hungarian, English or German and must be retained for at least eight years.
Practical implications
Companies will be required to prepare more detailed and transparent schedules that clearly demonstrate the links between accounting and financial data. The alignment between transfer pricing documentation and data reporting will become closer, and taxpayers will be required to provide more detailed justifications for the application of exemptions.
Our recommendation
We recommend that companies review their related-party transactions at an early stage, prepare for DEMPE analyses and segmented profit and loss statements, and reassess their documentation processes. It is also advisable to consult with transfer pricing experts to determine the optimal timing for applying the new regulation and to evaluate the potential advantages and risks associated with early adoption.
Should you have any questions regarding the practical application of the new transfer pricing documentation rules, our transfer pricing advisory team will be pleased to assist.
Artificial intelligence (AI) is increasingly and visibly transforming corporate operations. The business use of the technology is spreading at a rapid pace, and AI is taking on an ever more significant role in optimising and enhancing the efficiency of financial processes as well.
However, lawmakers are not standing still either, and we are witnessing substantial developments in the regulatory environment. The European Union’s new regulation, the EU AI Act, may pose adaptation challenges for domestic companies that could dampen their appetite for innovation.
The regulation, which enters into force in August 2025, aims to regulate prohibited practices, the development and use of high-risk AI systems, their compliance, and, more broadly, the ethical boundaries of artificial intelligence. It establishes different categories for such systems: classification may range from low-risk systems to high-risk and even unacceptable-risk solutions. It also defines prohibited practices that may pose a threat to privacy, and restricts the use of AI systems that could significantly endanger the safety and fundamental rights of individuals or organisations.
The EU AI Act also requires transparency obligations from both developers and users of AI systems, imposing additional documentation and information duties on those concerned.
While EU-level regulation is gradually and steadily being integrated into domestic law, it is already coming within reach for Hungarian companies as well. The recently published Act LXXV of 2025 regulates the Hungarian implementation of the European Union’s 2024/1689 AI Regulation, and establishes the framework for setting up two new national authorities, which will begin their operations on the 31st day following promulgation (expected in December 2025).
National Accreditation Authority
As the AI Notification Authority, it will be responsible for designating and supervising organisations that carry out conformity assessments for high-risk AI systems. Designation may only apply to organisations with accredited status, and the authorisation may be withdrawn if the accreditation ceases. The authority will begin operations on the 31st day following promulgation (expected in December 2025).
Tasks of the AI Market Surveillance Authority
Its tasks include, among others, the ex-post monitoring of the lawful use of AI systems and the conduct of market surveillance procedures. This authority will also act as the sole national contact point towards the EU.
In addition, it has been empowered to impose administrative fines, which may be substantial for companies. When determining the highest fine amounts, the EU Regulation 2024/1689 must be taken into account, which sets a very high range for national authorities — between approximately HUF 285 million and HUF 13.3 billion.
Hungarian Artificial Intelligence Council
Alongside the two new authorities, the regulation also identifies a third body, intended to have a strategic and coordination role. While the National Accreditation Authority will assess technical compliance and the AI Market Surveillance Authority will conduct legality checks, the Hungarian Artificial Intelligence Council will not make decisions or conduct procedures, and therefore will not directly affect corporate operations.
The Council’s purpose is to support AI strategy and policy, and to coordinate the domestic application of AI. It will serve in an advisory capacity to the government, make recommendations, provide opinions, and coordinate the activities of the organisations involved.
Its members include representatives of state institutions, professional organisations, academia, and economic actors — for example, the Hungarian National Bank, the Hungarian Competition Authority, the Hungarian Academy of Sciences, and the Hungarian Chamber of Commerce and Industry. The body will meet quarterly, and its chair will be appointed by the Prime Minister.
AI is not only a technological decision
The rise of artificial intelligence requires not only technological adaptation but also legal compliance from companies. As organisations strive to keep pace with innovation, it is essential that they prepare in time for the new AI regulations, particularly the requirements of the EU AI Act. For safe and lawful application, companies must understand the risk classification of AI systems, the regulatory expectations arising from their use, and the potential risks of non-compliance.
On 19 November 2025, Act LXXXIII of 2025 on amendments to certain tax laws aimed at reducing administrative burdens and ensuring legal harmonisation was published in the Hungarian Gazette, followed on 21 November 2025 by Act LXXXIV of 2025 on measures to reduce the tax burden of businesses (hereinafter together: the “Tax Package”). The amendments introduced by the Tax Package affect several types of taxes; in this newsletter we summarise the most important changes.
Personal income tax
The changes in personal income taxation focus on simplifying the application of family allowances and on the treatment of losses related to crypto assets.
The Tax Package allows mothers to indicate in their tax advance declaration for which dependants they wish to claim the allowances. The employer will automatically treat this declaration as a continuing tax advance declaration. This is particularly beneficial for those raising several children, as they will no longer have to submit a new declaration every year if their entitlement does not change.
A significant relief will apply to transactions involving crypto assets, as the possibility of tax equalisation will be extended: losses from such transactions will no longer only be available for set-off in the two tax years following their occurrence but may be used without any time limitation. This favourable rule may already be applied in the tax return for the 2025 tax year. Taxpayers must continue to keep records of their losses and must indicate these as information data in their tax return.
The cost ratio of private entrepreneurs, subject to flat-rate taxation under the Hungarian Personal Income Tax Act, will increase from the current 40% to 45% in 2026 and to 50% in 2027.
Between 1 December 2025 and 30 April 2026, the SZÉP card (acronym for Széchenyi Pihenő Kártya, “Széchenyi Leisure Card”) may also be used for the purchase of foodstuffs specified in a separate Government Decree.
Reflecting a crime type that has unfortunately become increasingly common in recent years, from 2026 the Tax Package exempts from tax the compensation received by a client who has fallen victim to bank phishing and is indemnified by the financial institution with which s/he has a contractual relationship. The tax exemption is independent of the legal title under which the compensation is paid, meaning that the benefit granted to the client is entirely tax-free.
Corporate income tax
According to the amendments in corporate income tax, in the case of subsidies for the renovation of sports-related real estate, a mortgage in favour of the State must be registered on the property for investments of at least HUF 5 million.
The free transfer of assets implemented from the subsidy will only be possible if their book value is zero. In the case of a transfer for consideration, the price may not be lower than the market value or the book value. If the asset is disposed of before the end of the maintenance period, the purchaser must undertake to comply with the maintenance obligation. The Tax Package also contains technical clarifications, such as changes in the proportion of cost accounting and the inclusion of sports academies in the subsidy system.
Since 2024, in relation to research and development (R&D) activities, taxpayers may choose to apply a tax credit instead of a tax base decreasing item. This choice is of a long-term nature and, under the current regulations, can only be changed in the 6th year following the first tax year covered by the choice. This period is now shortened by one year, meaning that from the 5th tax year it will be possible to revert to applying the tax base decreasing item.
The Tax Package also introduces a tightening regarding the amount of the R&D tax credit where the taxpayer claims it in relation to R&D activities carried out jointly with higher education institutions, research institutes or state-owned research centres. In these cases, the tax credit previously corresponded to the eligible costs (up to a maximum of HUF 500 million). Under the Tax Package, this ratio will decrease while the HUF 500 million upper limit remains unchanged: in the case of basic research, 100% of the costs will continue to be eligible, while for applied research only 50% and for experimental development only 25% of the costs may be considered.
From 2026, a new corporate tax credit will be available for the remediation of environmental damage and for other specified environmental investments, such as projects aimed at restoring soil and water quality or rehabilitating habitats, with a present value of at least HUF 100 million. The tax credit will amount to 100% of the eligible costs in the case of the elimination of environmental damage and 70% in the case of ecological developments and may be increased by 20 percentage points for small enterprises and by 10 percentage points for medium-sized enterprises, up to a maximum of EUR 30 million. This tax credit may first be applied to investments started on or after 1 January 2026.
Also from 2026, development tax incentives may be claimed in respect of the commissioning and operation of investments that increase the production capacity of clean technologies. These may be applied at a maximum aid intensity of 15% in Budapest and 35% in other regions (subject to the rules on cumulation of aid). Such an investment will only be eligible for support if, in the absence of the aid, it would be carried out outside the territory of the European Economic Area. A transitional provision ensures that taxpayers who have already submitted a development tax incentive notification may switch to this new title. At the same time, the development tax incentive title supporting strategic investments related to the net zero emissions target will be discontinued, as the EU Temporary Crisis and Transition Framework (TCTF) will no longer be applicable from 2026.
From 2026, the threshold for quarterly corporate tax advance payments will rise from HUF 5 million to HUF 20 million, allowing more companies to benefit from the less frequent, quarterly payment obligation. For taxpayers with a calendar tax year, the transition can start from July 2026, and the advance payment for the last quarter must be made by 20 December.
The Tax Package also clarifies the rules on subsidies for sports academies: it aims to specify the conditions under which the transfer of 1% of the subsidy may be made, thereby increasing transparency and legal certainty in relation to the accounting of such subsidies.
Global minimum tax
The regulations on the global minimum tax will be substantially expanded. The concepts of “simplified covered tax” and “simplified effective tax rate” will be introduced. In addition, the definitions of “qualifying country-by-country report” and “qualifying financial statements” will be aligned with OECD guidelines, thereby ensuring comparability and legal harmonisation.
Value added tax
The amendments to value added tax (VAT) affect both VAT groups and VAT returns.
If the representative of a VAT group ceases to exist, the tax authority will be entitled to designate a new representative (the group member with the largest tax performance) if the members do not make a relevant notification within 15 days. This is a clearly positive change, as in the past the failure to meet this deadline resulted in the dissolution of the VAT group. From 2026, the scope of liability of members of the VAT group and of taxable persons outside the group will be expanded. In addition, the joint and several liability of VAT group members will no longer be limited to VAT but will also extend to all legal consequences specified in the Hungarian Act on the Rules of Taxation. This means that the group members and the taxable persons outside the group will be jointly liable for obligations arising from defaults, irregularities or other tax law consequences committed by a group member, including tax penalties and late payment interest.
From 1 July 2026, taxable persons will have a new obligation in their VAT returns: for each incoming invoice issued in their name, they must indicate separately the amount of VAT deducted on a per-invoice basis. This must be provided broken down by tax rate, i.e. separately for items subject to the 27%, 18% and 5% rates (it should be noted that the VAT return already contains this option, but its completion is currently voluntary). This change will result in additional administrative workload for businesses processing a large number of incoming invoices, as VAT returns will require more detailed data reporting.
If a taxable person retrospectively registers for VAT with the tax authority, they must submit supplementary VAT returns monthly for all previous periods in which they had a VAT payment obligation but did not yet file a VAT return. This differs from the previous practice, under which it was sufficient to submit quarterly VAT returns for the years preceding the current year.
From 1 January 2026, the VAT rate on the supply of meat, slaughter by-products and offal of domesticated cattle will be reduced to 5%.
The upper threshold of the VAT exempt status for small enterprises will gradually increase from the current HUF 18 million: to HUF 20 million in 2026, to HUF 22 million in 2027 and to HUF 24 million in 2028.
Rules of taxation
The Tax Package amends the Hungarian Act on the Rules of Taxation so that the Tax Authority will be entitled to cancel the tax number of a taxpayer who fails to comply with its obligation to report its legal representative. The tax number may also be cancelled if the taxpayer fails to submit its VAT return, recapitulative statement or social security return and does not remedy this omission within 90 days after the statutory deadline.
Before the tax number is cancelled, the tax authority will send the taxpayer a notice with a 30-day deadline to submit the missing notification or return, thereby providing an opportunity to restore lawful operation. If the taxpayer fails to comply with this notice, its tax number will be automatically cancelled, and the tax authority will immediately inform the court of registration, which will initiate proceedings to terminate the company.
Social contribution tax
The Hungarian Act on Social Contribution Tax will also be amended: from 2026, the monthly minimum base of social contribution tax for self-employed individuals and partners in partnerships treated as main-occupation entrepreneurs will be reduced from 112.5% of the minimum wage to 100% of the minimum wage.
In addition, there will be an administrative simplification for individual entrepreneurs: those who opt for taxation based on entrepreneurial income – similarly to flat-rate taxpayers – will be able to assess and pay their social security contributions and social contribution tax on a quarterly basis instead of monthly.
Local taxes
The amendments to local taxes clarify and extend the concept of rights representing assets. In the future, the lessee’s right in a leasing arrangement and the right of the purchaser in transactions where title is subject to retention of ownership will also be classified as rights representing assets.
Furthermore, the right of municipalities to levy local taxes will be restricted. Under the current regulations, such tax may not be imposed on arable land; the Tax Package extends this prohibition to forests and the related rights representing assets. Thus, from 2026, municipalities will not be allowed to levy local taxes on properties registered as forests or on the rights of use or disposal attached to them.
Small business tax
With regard to the small business tax, it is important to highlight that the entry criteria will become more favourable from 1 December 2025 (the date from which the option to choose this tax regime becomes available): the headcount limit (average statistical number of employees) will increase from 50 to 100, and the revenue and balance sheet total thresholds from HUF 3 billion to HUF 6 billion. From 2026, the exit thresholds will also be higher: the revenue threshold will rise to HUF 12 billion and the headcount limit to 200.
In addition, when calculating the cash balance for the purpose of the small business tax, electronic payment instruments (such as PayPal, Revolut) will not be considered.
Registration tax
As regards registration tax, the Tax Package clarifies that if the owner and the operator of a vehicle are different persons, the taxpayer liable to pay the registration tax is the owner.
Advertisement tax
The Tax Package postpones the application of the advertisement tax only until 30 June 2026, which means that this tax, which has been effectively dormant for years, will return as from 1 July 2026 in the middle of the calendar year. The primary taxpayers of the advertisement tax are entities publishing advertisements – media companies, publishers, outdoor advertising providers, online platforms – but in certain cases clients (advertisers) may also become liable. For publishers of advertisements, advertising revenues up to HUF 100 million will be tax-free, while the amount exceeding this threshold will be subject to a 7.5% advertisement tax. Clients that become taxpayers (in the absence of a declaration from the publisher) will be subject to a 5% advertisement tax, with the aggregate monthly consideration for advertisements being tax-exempt up to HUF 2.5 million. As things currently stand, the advertisement tax returning in mid-2026 will place a significant administrative and financial burden on the affected entities (media companies and advertisers), so they are advised to closely monitor any (potential) developments and to start preparing in time for the “old-new” regime.
Retail tax
The tax brackets of the retail tax have already been amended for the 2025 tax year: the upper limit of the tax exemption has been increased from HUF 500 million to HUF 1 billion, the 0.15% rate applies up to HUF 50 billion, the 1% rate applies up to HUF 150 billion, and the 4.5% tax applies only to the part of the tax base exceeding HUF 150 billion. The change does not apply to retailers of motor vehicle fuel.
Duties
The Tax Package brings a significant change to gift duty rules for business entities: the acquisition of property through the waiver of a loan granted by the owner will be exempt from gift duty if the waiver takes place in the framework of a voluntary dissolution and the process ends with the company being removed from the register without a legal successor. Previously, such acquisitions were subject to duty, so this change will create more favourable conditions for companies being wound up through voluntary dissolution.
The rules on transfer duty relating to residential property will also change, in cases where an individual purchases, exchanges or sells multiple residential properties within a short period of time. Under the previous rules, when determining the difference in value forming the basis of the duty, only the immediately preceding or subsequent transaction of the same legal title could be considered. From 2026, under the Tax Package, this restriction will cease to apply and, instead, any previous or subsequent transaction of the same legal title resulting in the most favourable difference in value for the taxpayer liable for the duty may be taken into account.
Social security
The amendments to the social security regulations introduce a new concept, the long-term agency relationship. This is a type of engagement based on an agency contract that the employer specifically registers with the tax authority as a long-term agency. A characteristic of this relationship, similar to an employment relationship, is that it will be mandatory to determine a minimum contribution base. Accordingly, the basis for contributions will be at least 30% of the applicable minimum wage per month, regardless of the actual remuneration paid. This rule is intended to ensure the predictability and sustainability of entitlements to social security benefits.
According to the Tax Package, from 1 October 2026 the Complex Legal Relationship Register (in Hungarian: Komplex Jogviszony Nyilvántartás, KJNY) will be launched as a central electronic database jointly established by the tax authority, the managing body of the Health Insurance Fund and the Hungarian State Treasury. The purpose of the KJNY is to manage in one place the data relating to individuals’ social security relationships, such as the validity of their social security number (abbreviated in Hungarian as “TAJ”), the type and duration of their insurance relationship and other relevant information.
The KJNY will be accompanied by an online administration interface and a mobile application, enabling citizens to retrieve data relating to their own legal relationships and to carry out certain procedures electronically.
Bank surtax
From 1 January 2026 (for as long as the state of emergency remains in force), credit institutions and financial enterprises will have to pay a bank surtax of 10% instead of the current 8% on the part of their tax base up to HUF 20 billion, and 30% instead of 20% on the part exceeding this threshold. In addition, the tax credit they can claim by purchasing government securities will be reduced from the previous 50% to 30%. Affected entities will first have to take these changes into account in their tax year starting in 2026.
Excise duty
The automatic increase (indexation) of excise duty on petrol, kerosene and diesel, originally scheduled for 1 January 2026, will only enter into force on 1 July 2026.
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This newsletter was prepared based on the information available on the date of its publication and is intended for general information purposes only. It does not constitute, and should not be relied upon as, personalised tax advice and does not replace such advice in any respect.
Is ESG becoming a defining driver of business growth?
In recent years, cybersecurity quietly rose to the top of executive agendas. The same shift is now happening with ESG. What was once a compliance matter has become a strategic necessity: transparency, accountability, and credible sustainability performance are now the essential foundations of trust.
According to Grant Thornton’s experience, companies that proactively manage ESG not only survive in an uncertain economic and business environment — they evolve, adapt, and gain advantage. The impact mechanism of ESG is complex; it simultaneously influences client service, internal operations, and brand reputation.
Why has ESG become a key domain?
Major crises of the past — the 2008 financial crisis, the COVID period, and ongoing geopolitical tensions — have drawn a clear pattern. Companies that build an integrated ESG strategy consistently outperform in three areas:
- risk management
- value creation
- resilience during crises
Sustainability has now become as strategic as information security once was. Those who act early gain an edge; those who don’t risk falling behind.
The ESG train is already accelerating, and it’s worth getting a ticket in time. Although occasional voices of “rollback” can be heard, international trends and the regulatory environment point firmly in one direction: the role of ESG will continue to grow.
The true depth of the sustainability transition
A recent Harvard Business Review analysis shows that while many companies made ambitious sustainability commitments, delivering on them requires far deeper transformation than most expect.
The drivers of this change are already underway:
- Global frameworks: Paris Climate Agreement
- Regional programmes: EU Green Deal
- New regulations: CSRD, CSDDD, PPWR
This environment not only encourages sustainability transformation — it accelerates it across sectors and value chains.
Thinking in systems — not in projects
Sustainability is not just another CSR initiative; it is an integrated part of business operations. It creates real business value when:
- ESG data flows through a unified system
- business units pursue aligned objectives
- ESG considerations become part of performance management
Instead of isolated initiatives, companies must think in long-term, measurable, interconnected systems.
Is AI the new catalyst for ESG data analysis?
Artificial intelligence is opening a new era in ESG. The following tools are already emerging or rapidly spreading:
- predictive risk analytics for supply chains and environmental risks
- automated, regulation-aligned reporting
- real-time, audit-ready ESG dashboards
- intelligent data aggregation from financial, HR, supplier, IoT and social data
With AI, experts can shift from manual data entry to meaningful analysis and strategic decision-making.
A turning point has arrived for Hungarian companies
In Hungary, ESG is not primarily a regulatory compliance question — the regulatory environment has actually become more flexible. Sustainability is part of business resilience and competitiveness: energy efficiency, water management, waste reduction, employee turnover, transparent internal processes, and regulatory clarity (and many more) are the challenges that must be addressed. Those who start building systemically and early not only comply but gain a market advantage.
Companies that act now will achieve:
- stronger corporate culture
- more resilient operations
- greater market trust
- sustainable growth
If you would like to identify the real business opportunities ESG can unlock for your organisation, we are here to support you.
Amendment of the Accounting Act and the Accounting Treatment of Transfer Pricing Adjustments
Act LXXXIII of 2025 – practical guidance for companies
The tax package, published on 19 November 2025 with the aim of reducing administrative burdens and ensuring legal harmonisation, introduces significant changes in the accounting treatment of transfer pricing adjustments. Sections 105–107 of Act LXXXIII of 2025 stipulate that the difference between the arm’s length price under the Corporate Income Tax Act and the actual consideration applied – i.e. the TP adjustment – must also be recognised in the books. This brings the year-end lump-sum tax base adjustment, recorded with an accounting voucher, and the financial statements closer together, reducing interpretative uncertainties.
Why was the amendment necessary?
Until now, most transfer pricing adjustments appeared only in the tax base, and not all changes were reflected in accounting. This discrepancy arose mainly in the case of year-end, one-off TP adjustments. The legislator’s intention was therefore to ensure transparency and consistent data reporting: if a company subsequently modifies the consideration applied to a related-party transaction, this must be reflected both in the tax and accounting records.
The amendment enters into force on 1 January 2026 and is mandatory for financial years starting in 2026. However, it may also be applied to financial statements relating to the financial year starting in 2025.
What exactly has changed?
If the price of a transaction is subsequently modified based on the parties’ agreement, the TP adjustment must be recorded in the books by the balance sheet preparation date. The adjustment may affect the following items:
- acquisition cost of assets – Accounting Act Section 47 (10)
- net sales revenue – Accounting Act Section 73 (4)
- costs and expenses relating to services received – Accounting Act Section 78 (8)
A significant simplification is that in the case of a voluntary arm’s length price adjustment, it is not mandatory to adjust to the median; the correction may be recorded anywhere within the arm’s length range.
Why is this important in practice?
Section 18 of the Corporate Income Tax Act remains clear: all related-party transactions must be carried out at arm’s length. The amendment to the Accounting Act reinforces this requirement, meaning that companies must:
- ensure consistency between tax base adjustments and accounting data,
- support year-end TP adjustments with unified documentation,
- take advantage of the flexibility of choosing any point within the arm’s length range, without a median requirement.
It should be emphasised that although transactions below the HUF 100 million threshold may be exempt from transfer pricing documentation and reporting requirements, the obligation to comply with the arm’s length principle applies to all related-party transactions. This means that the TP adjustment — and thus the accounting recognition — is also mandatory for transactions below the threshold, regardless of documentation requirements.
If you would like to determine the arm’s length range by the balance sheet preparation date, or assess how the amendment affects your company, or review the accounting and tax requirements applicable to year-end TP adjustments, our expert team is ready to assist.