The US Treasury recently made a significant announcement concerning its diplomatic ties with Hungary. On 8 July 2022, the United States notified Hungary that it would be terminating their Tax Convention. According to information disseminated by the US Treasury, this termination is set to take effect on 8 January 2023.
Rasheed Khan, Tax Reporting and Compliance Expert at TAINA, is closely following these unfolding developments. He is committed to promptly sharing any new information as it becomes available. Khan has put together an in-depth whitepaper examining the institutional implications of the US severing this tax treaty with Hungary.
The termination of the tax treaty will bring about significant changes for financial institutions and intermediaries. These entities will be compelled to revise their current policies and procedures. Specifically, they will need to adapt to changes relating to form sign date and withholding rate.
Khan’s whitepaper addresses a multitude of pressing questions arising from this latest regulatory upheaval. Key issues covered include the effective date of treaty termination, how it impacts financial institutions, its effect on intermediaries and withholding, and the potential ramifications if a new treaty is signed before 2024.
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