Hungary approves new CbC exchange agreement with the US

On 2 November 2023, Hungary formally approved signing a new Country-by-Country (CbC) exchange agreement with the United States. The agreement—Decree No. 1482/2023—was published in the Official Gazette.

This follows the previous CbC exchange agreement in 2018, which Hungary and the United States signed but was terminated on 8 January 2023.

The previous CbC exchange agreement was terminated 6 months later after the US notified Hungary that the 1979 tax treaty between the two countries was canceled.

To exempt U.S. multinational enterprises (MNEs) from local filings in Hungary, a joint statement from late 2022 declared that CbC reports for fiscal years, starting from 1 January 2021 to 31 December 2021, submitted to the U.S. IRS will be automatically shared with Hungary’s tax authority under the 1988 Mutual Assistance Convention.

For fiscal years beginning from 1 January 2022 onwards, the U.S. and Hungary will have to agree on a new CbC exchange agreement or continue the automatic exchange.

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