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at the EU level, the United States followed through on termination, potentially because the treaty was viewed as outdated.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.
Contact:
Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “§,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.
More tax hot topics
No Results Found. Please search again using different keywords and/or filters.