Avoiding double taxation agreements: an overview of Hungary in 2024

In 2024, Hungary will maintain double tax treaties with numerous countries, ensuring efficient tax treatment of international business and personal incomes. However, attention should be given to changes and exceptions that may affect the application of these treaties.

It is worth noting that the Russian Federation unilaterally suspended the application of certain articles of the treaty on August 8, 2023, thereby applying its own internal regulations for the taxation of incomes and assets arising from transactions between the Russian and Hungarian parties. Hungary, however, continues to adhere to the provisions of the treaty until a contrary decision is made. Moreover, despite the signing a treaty with the US, the partner state has not ratified it, hence it is not applicable.

Hungary maintains valid treaties in 2024 with the following countries: Albania, Principality of Andorra, Australia, Austria (inheritance, legacy, and general), Azerbaijan, Bahrain, Belgium, Belarus, Bosnia and Herzegovina, Brazil, Bulgaria, Cyprus, Czech Republic, Denmark, South Africa, Egypt, Estonia (including the amending protocol), United Arab Emirates, Finland, France, Philippines, Georgia, Greece, the Netherlands, Hong Kong, Croatia, India, Indonesia, Iraq, Iran, Ireland, Iceland, Israel, Japan, Canada (including the amending protocol), Qatar, Kazakhstan, Kyrgyzstan, China, Republic of Korea, Kosovo, Kuwait (including the amending protocol), Poland (inheritance, general, and the amending protocol), Latvia (including the amending protocol), Liechtenstein, Lithuania, Luxembourg, North Macedonia, Malaysia, Malta, Morocco, Mexico, Moldova, Mongolia, Montenegro, United Kingdom, Germany, Norway, Italy, Oman, Armenia, Pakistan (including the amending protocol), Portugal, Romania (inheritance and general), San Marino, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, Spain, Switzerland, Sweden (inheritance and general), Taipei, Thailand, Turkey, Tunisia, Turkmenistan, Ukraine, Uruguay, Uzbekistan (including the amending protocol), Vietnam.

This extensive network of treaties ensures that individuals and businesses can avoid double taxation, facilitating simplified commercial and investment decisions and enhancing financial planning efficiency.

 Key Warnings

  • Russian Federation: The suspension of certain articles of the treaty can significantly affect the taxation of incomes from Russian-Hungarian transactions. It is recommended that the parties concerned pay special attention to Russian internal regulations and their changes.
  • USA: Since the US has not ratified the treaty , double taxation avoidance is not guaranteed in this case. This is particularly important for Hungarian and US citizens who face tax obligations from income generation between the two countries.

 Closing Remarks

Hungary’s extensive network of double tax treaties enables taxpayers to efficiently manage taxes on their global incomes. Changes and special cases, such as with the Russian Federation and the USA, highlight the complexity of tax matters and the importance of staying informed. A thorough understanding of the treaties is essential for legal certainty and tax planning.