They urged Biden from Washington not to tear up the Hungarian-US agreement

Republican members of the US Senate tax committees drafted a joint letter to US Treasury Secretary Janet Yellen. Termination of the Hungarian-American Double Taxation Agreement Regarding. Senators are offended primarily by the fact that the government has not discussed the decision with the legislature beforehand.

Photo: Casablanca Stock Exchange

In response to VG’s inquiry, Gergely Czoboly, a tax expert at PwC Hungary, drew attention to the fact that the question of whether it is legal to terminate tax treaties without Senate approval has already been raised in professional circles.

While an agreement cannot be implemented without the support of the Senate, would the government’s decision alone be enough to end it?

asked the expert. He added that the agreement only regulates the way in which one country must notify the other of its intention, but it does not say how a particular country can accept this according to its internal rules. Basically, each country has its own internal law regarding the authority the government needs to send the notice of termination. The question is, in fact, whether the Treasury, which wields executive power, has assumed the role of the legislature in this case, when it practically removes from the American legal system a tax agreement at the same level as the laws.

Senators also disagree I used it for diplomatic pressure The US Government Hungarian Tax Agreement, the termination of which may be directly related to the fact that Hungary, as the only member state It prevented the adoption of a global minimum tax in the European Union.

See also  Melting Arctic - Russians and Australians fear China

Biden is punishing Hungary, while he is also unable to introduce the minimum global tax in his country

The global minimum tax was excluded from Joe Biden’s body of laws, so the US government was excluded In vain, it exerted tremendous pressure on several European countries. Including Hungary, depending on the outcome of the by-election, the president may permanently abandon the highly criticized measure.

Regarding the termination of the agreement, speculation began about the options available. Gergeli Cobuli noted that one of the most frequently mentioned solutions – which senators also call the US Treasury secretary – would be

Information about the termination is withdrawn by the US party and thus stops the process.

This would give the parties the opportunity to keep the existing agreement in force until the new agreement that replaces it is accepted and put into effect. This solution is available until January 8, when The notification of the US party becomes effective.

Another solution we mentioned a lot is to use an agreement that was negotiated in 2010, but has not been ratified by the US legislature since, but according to a PwC expert, this is a much more difficult and less likely scenario for technical, professional and legal reasons, and There is almost no chance of a completely new agreement being negotiated by the parties and even approved by the US Senate.

If no agreement is reached, the agreement will expire on January 1, 2024, but the story may be influenced by the fact that in the United States The midterm elections will be held on Tuesday. Which can change the balance of power in both houses of the local legislature.

See also  Restaurant owners in the United States suffer from a shortage of workers

Leave a Reply

Your email address will not be published.