Hungary open to new double taxation avoidance treaty with US
Hungary is open to drafting a new double taxation avoidance treaty with the United States, Finance Minister Mihály Varga said after a meeting of the US-Hungary Business Council (USHBC) on Tuesday.
“The aim of the Hungarian government is to ensure a secure and competitive economic environment for taxpayers, which is why it strives to strengthen US-Hungarian cooperation on tax matters,” the ministry said in a statement.
The consequences of an earlier US decision to terminate the existing double taxation avoidance treaty with Hungary “are unfavourable for both countries”, Varga said.
Varga noted that some 1,700 US-owned companies employ around 107,000 people in Hungary. Bilateral trade between the two countries has reached an annual USD 8.3 billion, he added.
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I am sure the US is eager to fast track us, since they actively terminated the old treaty:
https://home.treasury.gov/news/press-releases/jy0872
The Treasury Department stated at the time the United States was ending the treaty with Hungary because “the benefits are no longer reciprocal,” citing a loss of tax revenue for the United States and little return for American investment in the country.
Hungary, which has the lowest corporate tax rates in Europe (funded by the world’s highest VAT rate), was blocking (Politician Veto) the European Union’s implementation of the global minimum tax agreement which over 100 OECD countries already had signed up to. A position that Mr. Szijjártó advocated. Job done!
Tax treaties are designed to help companies and persons of countries that have signed them avoid paying taxes on the same income to both nations and to resolve other potentially complicated tax situations. So it is a BIG deal. There was another one on the table – however, this one was held up by Republican (our Politicians BFFs!) Senator Rand Paul.
https://www.reuters.com/article/us-usa-tax-treaties-idUSBRE93R0A320130428
The US is a bully. It does not respect Hungary’s sovereignty. All those who are on the US’ side maybe the next victims. Sweden had more than thirty years to join NATO, it did not chose to. Presently, Sweden is not in danger. Even if Hungary agrees, Turkey is still a hold out. Fortunately, Turkey is big enough that US cannot black Mail the country.
@mariavontheresa – additional kicker on the US-HU Tax Treaty, it did not contain a LOB (limitation of benefits) provision. Very old school and prone to abuse https://freemanlaw.com/partnership-representatives-and-partnership-audits-the-bipartisan-budget-act-bba/limitation-on-benefits/ . Again. If Mr. Rand Paul (BFF Republican) had not stopped the new Treaty from being ratified, things may have been different.
And, yes. The US is protective when it comes to tax revenues. The US is pretty unique in that their system of taxation is not territorial, but global:
https://www.taxpolicycenter.org/briefing-book/how-does-current-system-international-taxation-work
Re Sweden “not in danger”. Try empathy, imagine what it is like for them. Poland is not spending off the charts on defense because they are “not in danger”. It is fear. And fear is a powerful motivator. It may even encourage you to pick sides?
https://breakingdefense.com/2023/10/sweden-beefing-up-military-presence-in-arctic-to-counter-russian-threat/
Turkey will be convinced to sign off – “big enough” and politically very savvy.
20% of. Sweden is migrant or illegal migrant population. Sweden’s entry actually may endanger NATO because of split loyalties. NATO secrets may be betrayed by those loyal to their native regimes. It is evident that major groups did not assimilate; these groups do not feel loyalty to Sweden and the EU or NATO.