Government Open to New Agreement with the U.S. on Double Taxation

MTI-Hungary Today 2023.10.04.

The consequences of the U.S.’ denunciation of the previous agreement are unfavorable for both countries, the Minister of Finance said after the U.S.-Hungary Business Council (USHBC) meeting.

Mihály Varga stressed that the Hungarian government aims to provide a safe and competitive economic environment for taxpayers, and is therefore seeking to strengthen U.S.-Hungarian tax cooperation, as reported by the Ministry of Finance in a statement.

Speaking about the relations between the two countries, Varga said that

the United States is the largest investor in Hungary outside the European Union,

with a share of nearly nine percent of the total investment portfolio. He added that the Hungarian government has so far signed strategic cooperation agreements with 94 companies, and 14 of them are from the United States.

In addition, 1,700 U.S. companies employ around 107,000 people in Hungary, and bilateral trade in goods increased by 16 percent from USD 7.1 billion (EUR 6.7 billion) to USD 8.3 billion (EUR 7.9 billion) in 2022, breaking the record for bilateral trade flows, the minister added.

The U.S.-Hungary Business Council, established in New York in 2016, organized the US-Hungary Economic Summit this year. The summit aims to bring new investors to Hungary alongside existing investors, the Ministry of Finance concluded its statement.

Fact

The United States notified Hungary on July 8, 2022, that it will unilaterally terminate the U.S.-Hungary Double Taxation Treaty. However, the provisions of the treaty may still apply for tax assessment purposes until December 31, 2023. The treaty’s main purpose was to determine the tax residence in the U.S. and Hungary and to encourage the regular payment of taxes by making them fairer and easier to pay.

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Via MTI, Featured image: Facebook/Varga Mihály