Tranferpricing services

Molnár & Partners Kft. has been providing transfer pricing services to many Hungarian companies operating as members of multinational groups for many years at a consistently high level.

In the case where several companies belong to the same ownership or interest group, i.e. a multinational enterprise or a group of companies, decisions may be taken that differ from market conditions, as decision-making is typically concentrated in one hand. The most typical example is price, as transfer prices between group members often differ from arm's length prices, affecting the profitability, profit and loss of each enterprise, and affecting tax liability. For transactions between associated enterprises, companies must ensure the application of the arm's length principle. Article 18 of Act LXXXI of 1996 on Corporate Tax and Dividend Tax (Tao. tv) defines the modification of prices between associated enterprises to the arm's length price and the method for determining the arm's length price.

Our experienced colleagues also check legal compliance with benchmark studies from AMADEUS, TP Catalyst and Opten databases.Under the Corporation Tax Act, taxpayers must determine the arm's length price in all cases. Taxpayers can be obligated to prepare transfer pricing documentation in connection with the determination of the arm's length price.

The transfer pricing documentation shows whether transfer prices of intra-group transactions are in line with the arm’s length principle for the analysed fiscal year.  It is recommended to have a transfer pricing documentation not only for those who are obliged to prepare the documentation according to the NGM Decree 32/2017, but also for all companies that have a business relationship with their affiliated companies. In the event of a tax audit, these documents must be made available to the tax authorities by taxpayers subject to the transfer pricing documentation obligation. For taxpayers that are not subject to the obligation, transfer pricing documentation can be of great help in proving that they comply with the arm's length principle.

However, it is also important to note that a transfer pricing documentation is not for a lifetime. Companies that prepare their transfer pricing documentations for only one or two years, hoping that this will give them security for the following years in the event of a transfer pricing audit, are taking a huge risk. According to the current Regulation 32/2017 NGM on the preparation of transfer pricing documentation, the documentation must be prepared annually. We believe that we need to work with our clients on an ongoing basis, year after year, to prepare the necessary transfer pricing documentation for them.

We also review, revise and update existing transfer pricing documentations to support our clients in ensuring compliance with legal requirements. According to domestic legislation - in line with the OECD Guidelines to be taken into account internationally in this area-, transfer pricing documentation must consist of the Master File, which provides an overview of the group from transfer pricing perspective, and the Local File, which provides detailed information related to the taxpayer and the intercompany transactions. Our company can prepare both the Master File and the Local File in Hungarian and in foreign languages (English, German).


A Master File must be prepared if there is at least one intercompany transaction that is not exempt from the obligation to prepare transfer pricing documentation. The Master File contains information relevant to transfer pricing for the entire group, which may also require the assistance of the (regional) head office of the group. Without a Master File, the transfer pricing documentation is incomplete.


The Local File contains a description of the taxpayer obligated to prepare the transfer pricing documentation (description of the management structure, intra-group reporting system, organisational chart, competitors, strategy, business reorganisations in the current and previous year, etc.), and for each transaction to be documented, it also contains, among others (as described in the OECD Guidelines):

  • a detailed description of the transaction, the parties involved, the amount invoiced, the amount paid and the contract (copy of the agreement),
  • a detailed comparability and functional analysis of the taxpayer and associated enterprises involved in the transaction, including any changes compared to prior years,
  • an indication of the most appropriate transfer pricing method with regard to the category of transaction as well as the indication of which associated enterprise is selected as tested party and the reasons for these selections,
  • a list and description of selected internal and external comparable uncontrolled transactions and the relevant financial data of the independent enterprises relied on in the transfer pricing analysis, including a description of the comparable search methodology and the source of that information,
  • a description of any comparability adjustments and am indication of whether adjustments have been made to the results of the tested party, the comparable uncontrolled transactions or both,
  • a detailed description that the transactions were priced on an arm's length basis based on the selected transfer pricing method,
  • a summary of the financial information used in applying the transfer pricing methodology,
  • a concise explanation of how the financial data used in applying the arm's length pricing method can be tied to the taxpayer's annual financial statements.

Whether it is a Master File or a Local File, do not hesitate to contact us for transfer pricing documentation!


Éva Szabados