Global Daily Tax News, Hungary Seeking Replacement US Double Tax Pact, (Oct 16, 2023)

The Hungarian Government is seeking to open negotiations with the United States on a replacement double tax agreement.

In June 2022, the United States Government decided to terminate the country's double tax agreement with Hungary on account of the EU member state's opposition to the EU minimum tax directive. The European Commission had aimed to have the Directive agreed by EU member states by March 2022 but Hungary vetoed the measure. In December 2022, the Directive was passed unanimously, with Hungary declining to vote.

Hungary's corporate tax rate is nine percent, below the international agreed limit of 15 percent under the Pillar Two minimum corporate tax for the world's largest multinationals.

Following a recent meeting of the American-Hungarian Business Council (USHBC), Hungarian Finance Minister Mihaly Varga said, "The Hungarian government's goal is to provide a safe and competitive economic environment for taxpayers, and therefore it is striving to strengthen American-Hungarian tax cooperation."

Varga noted the United States is the largest investor outside the EU for Hungary. About 1,700 American companies employ about 107,000 Hungarian nationals.