Skip to main content

US Ends Double Tax Treaty with Hungary

July 19, 2022

Looks like the global minimum tax is having a cross-border effect even before it’s actually implemented. Last week, the U.S. treasury announced that it would be ending a 43-year double tax treaty with Hungary. The decision comes on the heels of Hungary’s opposition to the global minimum tax, which Treasury Secretary Janet Yellen has championed, and to which the EU has been trying to get all 27 member states to agree on unanimously. While it may sound like Mission Impossible, the EU was remarkably close—it had 26 member states in agreement. Then Hungary, which had previously supported the 15% global minimum tax rules that allows jurisdictions in certain situations to top up taxes to taxpayers that have paid less than the 15% minimum, unexpectedly withdrew its support. Now the U.S. is ending its treaty—officially ceasing on January 8, 2023, and no longer be in effect as of January 1, 2024.