Hungary treaty no longer in effect


The IRS announced on Dec. 29, 2023, (Announcement 2024-5) that the United States-Hungary Tax Treaty has been terminated effective on Jan. 8, 2023. The United States first provided notice to the Republic of Hungary on July 8, 2022, that the treaty would be terminated. 


For tax withheld at the source, the treaty ceases to have effect regarding amounts paid or credited on or after Jan. 1, 2024. For other taxes, the treaty ceases to have effect regarding tax periods beginning on or after Jan. 1, 2024.


Grant Thornton Insight

The original notice of termination was viewed at the time to be partially in response to Hungary stalling implementation of Pillar 2 in the European Union (EU). Despite the fact that implementation was ultimately approved at the EU level, the United States followed through on termination, potentially because the treaty was viewed as outdated. An updated treaty has been pending in the Senate since 2010. 



Cory Perry

Washington DC, Washington DC

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