U.S.A./Hungary Income Tax Treaty Terminated

    Feb 06, 2023 @ 06:26 PM / by Jeremy Piccoli

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    U.S.A./Hungary Income Tax Treaty Terminated    

    The U.S. Treasury Department recently announced that the U.S.A./Hungary Income Tax Treaty (in force since 1979) is officially terminated, effective January 8, 2023. 

    The cessation of the agreement is a direct result of Hungary’s opposition of the European Union’s implementation of a global corporate minimum income tax rate of 15%.  

    The U.S. Treasury’s position is that Hungary’s 9% rate – less than half of the U.S. 21% rate – results in a unilateral treaty benefit to Hungary. The U.S.A. is using all avenues to pressure countries to implement a 15% minimum rate, which has already been agreed to by nearly 140 countries. Hungary argues that a rate increase will make it difficult to attract commerce and employment within its borders.

    For global mobility professionals, the dissolution may result in future higher tax costs for short-term assignments between the two countries.

     

     

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    Topics: International Tax, Global Mobility, short term assignments, International Tax Guide, United States, Hungary

    Jeremy Piccoli

    Written by Jeremy Piccoli

    Jeremy joined AIRINC in the fall of 2012 and is responsible for managing AIRINC’s International Tax Guide and tax calculator products, as well as consulting with clients. Prior to joining AIRINC, Jeremy spent more than 6 years with PricewaterhouseCoopers’ International Assignment Services practices in Hartford and Boston, providing tax compliance and consulting services to multinational companies and their expatriate population. He received his B.S. with a concentration in Accounting and a Master of Science in Accounting from the University of Connecticut. Jeremy is an Enrolled Agent, a federally licensed tax practitioner who specializes in taxation.