Hungarian transfer price regulation is in line with the provisions of the OECD transfer pricing guidelines.
In related party contracts, the parties must apply prices that are identical with the prices that independent parties would apply under similar circumstances. If, in the contracts or agreements concluded between them, related parties apply prices higher or lower than the consideration that independent parties would apply under similar circumstances, they must or may adjust their tax base by the difference between the arm's length price and the consideration actually applied.
The taxpayer must increase its pre-tax profit by the amount of the difference if, as a result of the difference, it achieved lower pre-tax profit than it would have achieved if the arm's length price had been applied.
If the taxpayer achieved higher pre-tax profit than it would have achieved if the arm's length price had been applied, it may reduce its tax base provided that certain conditions are fulfilled.