Hungary and the US Sign New Double Taxation Avoidance Agreement

Hungary and the United States have signed an agreement designed to avoid double taxation and tax evasion, the Finance Ministry told MTI on Thursday. The new agreement will replace the one signed in 1979. Finance Minister Peter Oszkó signed on behalf of Hungary and US Ambassador to Hungary Eleni Tsakopoulos Kounalakis for the US.

The economic and political changes and Hungary’s participation in various international organizations such as OECD also called for the replacement of the 30-year-old agreement. The new agreement aims at regulating taxation with transparent rules. It is operative for income-taxes and clarifies which state has the right to levy tax for each type of earning category. The agreement takes into account and is based on the principle of equal opportunities, i.e. each state has the right to initiate a mutual arbitration if it feels that a taxation procedure is not in accordance with the agreement. The agreement will be sent to Parliament for approval, which is expected before the end of February. If approved, it comes into effect from January 2011.

 

News Monitoring