US cancels decades-old agreement with Hungary over Orbán’s opposition
The US Treasury on Friday said it was moving to terminate a 1979 tax treaty with Hungary. It is in the wake of Budapest’s decision to block the European Union’s implementation of a new, 15 percent global minimum tax. The timing of the termination following years of US concerns about the treaty is noteworthy. It suggests that the Treasury is using it to try to pressure Hungarian Prime Minister Viktor Orbán to agree to implement the 15 percent global minimum tax. An agreemnet accepted by nearly 140 countries. Continue reading below for more information on the subject.
Decades-old agreement up in flames
Reuters reports from Washington on 8 July, that The US Treasury on Friday said it was moving to terminate a 1979 tax treaty with Hungary in the wake of Budapest’s decision to block the European Union’s implementation of a new, 15 percent global minimum tax. A Treasury spokesperson said that since Hungary lowered its corporate tax rate to 9 percent. That is less than half the 21 percent US rate. Conclusively, this means that the benefits of the tax treaty unilaterally benefit Hungary and no longer benefit the United States.
The agreement in question was a regulation on the proclamation of the Convention between the Government of the Hungarian People’s Republic and the Government of the United States of America. It was for the avoidance and prevention of double taxation in the field of income taxes. The agreement was in effect from 12 February 1979, writes Jogtár.hu, until now.
Comments from the US Treasury
“The benefits are no longer reciprocal. With a significant loss of potential revenues to the United States and little in return for US business and investment in Hungary,” says the treasurer. The termination is expected to be completed in six months after the Treasury sends a formal notification to Hungarian authorities.
“Hungary made the US government’s longstanding concerns with the 1979 tax treaty worse. Worse by blocking the EU Directive to implement a global minimum tax,” the Treasury spokesperson continues. “If Hungary implemented a global minimum tax, this treaty would be less one-sided. Refusing to do so could exacerbate Hungary’s status as a treaty-shopping jurisdiction, further disadvantaging the United States.”
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Source: Reuters, jogtár.hu
ANOTHER “Friendship” – that continues to be Evaporated.
United States of America – it is known “wide” in distance – from the on-going dictatorial style of the Hungarian Prime Minister – Victor Orban, especially under the Presidency of J.R.Biden.
This decision is not of surprise, but should be understood by the Orban Government, that the U.S.A. and the European Union – do have strong ties, and that, with Hungary, it’s “stand alone” – not embracing ALL the Laws of the European Union, does no favours with the United States of America.
Friendships with Hungary – exclude Russia & China – who are our FRIENDS ???
God forbid – if Hungary “moves” any closer in it’s FRIENDSHIPS and “needs” of additional Financial assistance and “other” from Russia & China.
The United States of America – holds BIG cards – that if they decided to go deeper to tarnish,scold and damage Hungary, the implamentation from there perspective is quite elementary.
What damage – if any motor vehicle built in Hungary – the U.S.A. – stopped Imports ???
Similarities to a Sleeping Tiger – the U.S.A. – just waiting for its prey, getting the timing of its next move, that AGAIN will highlight – Democracy rules over a styled Government, that Dictates in Hungary, dismissing the “core” ingredients of Democracy.
I’m a US citizen married to a Hungarian. I live in both countries. The US taxation system is horrible and overly burdensome. The US system is the socialism that Hungary used to live under. It is a system designed solely for wealth redistribution. I receive virtually no benefit for the 40% rate I pay (when you add income tax + social security + medicare tax) . Most Americans I know prefer Orban over Biden, and that is even though the leftist liberal media in the United States and EU go to extremes to vilify Orban.
US treaties cannot be trusted under the democrats. If the US does not have its way, it will act like a child and willing to break a 43 year old agreement. US agreements are not worth the paper it is printed on. The democrats are having a fit. The democrats cannot protect the border, messed up the withdrawal from Afghanistan, killed the oil/gas industries, sold oil reserves to China while Americans cannot afford to fill their tanks , there is a shortage of baby formula, crime running rampant and a president that belittles its Supreme Court on the world stage. That is normality under a democrat Biden Administration.
Elections matter, hope that the Republicans will return to power.