U.S. Hungary Sign New Income Tax Treaty

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February 4, 2010
TG-535

U.S. Hungary Sign New Income Tax Treaty

WASHINGTON– The U.S. Department of the Treasury announced today a new income tax treaty between the United States and Hungary. 

In a ceremony held at the Hungarian Ministry of Finance in Budapest, Ambassador Eleni Tsakopoulos Kounalakis and Hungarian Finance Minister Péter Oszkó signed a new tax treaty that brings the existing agreement between the countries signed in 1979, into closer conformity with current U.S. tax treaty policy.  The new treaty contains a comprehensive limitation on benefits provision that is consistent with many recently concluded U.S. tax treaties and ensures that only residents of the United States and Hungary may enjoy the benefits of the treaty.

The agreement also maintains the existing treaty's withholding tax exemption on cross-border interest and royalty payments as well as the existing treaty's reductions in withholding taxes on cross-border dividend payments.  The agreement also provides for a new exemption from withholding tax on dividends paid to pension funds.

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• U.S. Hungary Tax Treaty