Exchange of information on tax issues between Hungary and the USA

Representatives of Hungary and the United States of America initialed an agreement to improve international tax compliance and assist the implementation of FATCA regulations.

According to the initialed version of the agreement, the data compiled from financial institutions will be forwarded to the tax authority of the US and information will also be received by the relevant authority of the country instead of the financial institutions involved. With the initialing of the agreement the phase of professional negotiations has been finalized and the document will be signed officially after the treaty has been endorsed by the Government.

Every country – among them Hungary — and several international organizations have recently placed special emphasis on combating international tax evasion and fraud. Among the measures introduced and initiated which are aimed to counter spreading tax abuse there are several solutions which Hungary intends to apply.

On the basis of the regulation based on the automatic exchange of information enacted by the USA which is designed to combat international tax evasion (Foreign Account Tax Compliance Act or FATCA), payments to financial institutions which do not provide information on the accounts held by United States citizens are subject to withholding tax of 30 percent. Read More