Taxation in Hungary - Double Taxation Prevention Treaties

Hungary: Double Taxation Prevention Treaties

Hungary signed a Treaty for the Prevention of
Double Taxation with many countries all over the
world.

A Double Taxation Prevention Treaty, in principle,
enables offsetting tax paid in one of 2 countries
against the tax payable in the other, in this way
preventing double taxation.

Another important factor is the grant of an
exemption or tax at a reduced rate on certain
receipts such as interest, royalties, dividends,
capital gains and others that are connected with a
transaction carried out between parties associated
with the Double Taxation Prevention Treaty.

It is important to stress that the Double Taxation
Prevention Treaty takes precedence over the
Hungarian Income Tax Ordinance.

In other words, if certain income is taxable under
the Hungarian Income Tax Ordinance but there is
an exemption (reduced tax) under any Taxation
Treaty, the income is taxed, if at all, but only
according to the provisions of the Taxation Treaty.

Taxation of Foreign Nationals in Hungary

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BUDAPEST
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