FREE: How the new UK-Hungary DTA will improve certainty

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

FREE: How the new UK-Hungary DTA will improve certainty

The UK and Hungary have signed a comprehensive agreement for the avoidance of double taxation that will provide increased cross-border certainty between the two countries.

The treaty was signed on Wednesday 7 September and will enter into force once both countries have finalised the necessary parliamentary procedures.

A previous treaty had been signed in 1977.

The treaty covers taxes on income and on capital gains imposed on behalf of a contracting state, as well as providing clarification over issues of residency and permanent establishment.

Greg Dorey, British ambassador to Hungary, said the agreement will increase confidence in cross-border trade.

“Since bilateral trade has reached record levels and the citizens of our two countries increasingly contribute to both of our economies, this is good news.”

“It also helps contribute towards a stable business environment which can foster foreign investment. And it protects governments’ taxing rights and against attempts to avoid or evade tax liability,” he added. “So this is an important step in making sure that our citizens pay their fair share towards the costs of our governments and the important services they provide.”

The treaty comes at a time when the UK government has been seeking stakeholder comment on legislation that was intended to combat tax avoidance schemes which exploit DTA provisions. Last week the Treasury announced it is cancelling that consultation. The cancellation is welcome, said one adviser.

“The cancellation of the consultation on double tax treaties, launched in summer, and confirmation that the government will adopt a more targeted approach in future, will be greeted with a sigh of relief,” said Chris Sanger, head of global tax policy at Ernst & Young. “Had the government’s proposals gone ahead, UK competitiveness would have been eroded. It would have hit commercial transactions by restricting access to funding markets and hiked up costs of investing into the UK.”

more across site & shared bottom lb ros

More from across our site

The threat of 50% tariffs on Brazilian goods coincides with new Brazilian legal powers to adopt retaliatory economic measures, local experts tell ITR
The country’s chancellor appears to have backtracked from previous pillar two scepticism; in other news, Donald Trump threatened Russia with 100% tariffs
In its latest G20 update, the OECD also revealed tense discussions with the US where the ‘significant threat’ of Section 899 was highlighted
The tax agency has increased compliance yield from wealthy individuals but cannot identify how much tax is paid by UK billionaires, the committee also claimed
Saffery cautioned that documentation requirements in new government proposals must be limited if medium-sized companies are not exempted from TP
The global minimum tax deal is not viable without US participation, Friedrich Merz has argued
Section 899 of the ‘one big beautiful’ bill would have spelled disaster for many international investors into the US, but following its shelving, attention turns to the fate of the OECD’s pillars
DLA Piper’s co-head of tax for the US and Latin America tells ITR about her fervent belief in equal access to the law, loving yoga, and paternal inspirations
Tax expert Craig Hillier agrees with the comparison of pillar two to using a sledgehammer to crack a nut
The amount is reported to be up 57% from the £5.6bn that the UK tax agency believes was underpaid in the previous year
Gift this article