Hungary – United States Tax Treaty
The Hungary-United States tax treaty has been terminated. Treaty terminated effective Jan 1, 2024. Statutory 30% rate now applies. Previously, the treaty provided reduced rates on dividends, interest, royalties, and pensions. With the termination, recipients of cross-border income can no longer claim treaty benefits and should consult with a tax professional about alternative relief mechanisms, including foreign tax credits in their country of residence.
Verified data
IRS Table 1 - Tax Rates on Income Other Than Personal Service Income (Rev. May 2023)
Withholding Rate Summary
Source: IRS Table 1 (Withholding Rates)| Income Type | Treaty Rate | Statutory Rate (United States) |
|---|---|---|
| Dividends (general) Portfolio investors | 30% | 30% |
| Dividends (qualified) Beneficial owner is a company holding >= 10% of voting stock | 30% | 30% |
| Interest Bank interest, bonds, loans | 30% | 30% |
| Royalties (avg) Patents, copyright, know-how, film/TV | 30% | — |
| Pensions Private pension distributions | 30% | — |
| Social Security Government social security benefits | 30% | — |
“Treaty Rate” is the maximum withholding permitted under this treaty. The actual effective rate may be lower if domestic law provides a more favorable rate independently. “Statutory Rate (United States)” shows the rate that applies when no treaty benefit is claimed. Qualified dividend rate requires: Beneficial owner is a company holding >= 10% of voting stock.
Dividends
The general dividend rate of 30% applies to portfolio investors. A reduced rate of 30% is available when beneficial owner is a company holding >= 10% of voting stock. Without the treaty, the statutory withholding rate on dividends is 30%.
Source: IRS Table 1 (Withholding Rates)
Interest
Interest payments (bank interest, bonds, loans) are subject to 30% withholding under this treaty, compared to the 30% statutory rate. This represents a no reduction from the statutory rate.
Source: IRS Table 1 (Withholding Rates)
Royalties
Royalty withholding rates vary by the type of intellectual property. This treaty distinguishes 4 categories, with rates ranging from 30% to 30%.
Source: IRS Table 1 (Withholding Rates)
Pensions & Social Security
Private pension distributions are subject to 30% withholding at source under this treaty. Government social security benefits are subject to 30% withholding.
Source: IRS Table 1 (Withholding Rates)
Comparative Context
Comparison data is not available for inactive treaties.