Intensive Transfer Pricing Audits

In recent years, the National Tax and Customs Administration (NAV) has prioritized auditing transfer prices applied between related companies. The establishment of four new transfer pricing expert departments by NAV highlights the importance of this area. These new departments began their work on 1 March 2025 and, in addition to transfer pricing audits, they are also responsible for audits related to the global minimum tax. This latter area represents a new element in the recently published 2025 audit plan.

In the context of transfer pricing, it is essential for taxpayers to be well-prepared, as there has been a significant increase in the number of compliance audits. These audits pay special attention to the finest details, which can be a preparatory step for a comprehensive audit. Once an audit is initiated, taxpayers are required to complete a general questionnaire, followed, if necessary, by a more detailed questionnaire focusing on areas considered risky from a transfer pricing perspective.

Taxpayers are advised to pay due attention to the completion of the transfer pricing disclosure, as it will be subject to thorough examination by auditors. The disclosure must be consistent with the transfer pricing documentation; otherwise, further questions can be expected. In the event of errors or discrepancies in the disclosure for 2022 or 2023, a correction to the corporate tax return might be advisable.

During this year's transfer pricing audits, the focus is expected to be on the following areas:

Transactions classified as risky: These include transactions involving intangible assets, loans, and other financial transactions, as well as transactions classified as risky based on the risk assessment of the Hungarian subsidiaries of a corporate group, country-by-country reports (CbCR), or data from cross-border structures.
Profitability issues: This category includes transactions where the taxpayer realizes a loss or very low profitability, with particular attention to limited-risk manufacturing, agency, commission, or distribution activities.
Transfer pricing documentation and data provision: Great emphasis is placed on checking the content of the transfer pricing disclosures and compliance with the terms specified in the Advance Pricing Agreements.

Given that the deadline for submitting the corporate tax return and preparing the transfer pricing documentation for 2024 is approaching for taxpayers with a calendar year-end, we recommend that all taxpayers review their compliance with legal obligations and consider whether any changes need to be made to previous tax returns.

If you have any questions regarding this topic or need assistance in preparing or reviewing your transfer pricing documentation or disclosure, our colleagues are at your disposal.