Earlier today, Deputy State Secretary for Taxation and Financial Affairs Gábor Orbán and Switzerland’s Ambassador to Hungary Jean-François Paroz signed a new bilateral Convention for the Avoidance of Double Taxation with Respect to Taxes on Income and on Capital at the Ministry for National Economy in Budapest.

As a new element, the agreement provides opportunity for a wide-ranging exchange of information in tax matters upon request in line with currently effective international regulatory standards. Related regulations serve as the legal basis for cooperation between the two countries’ authorities in charge of taxation for facilitating greater transparency in order to combat tax avoidance and fraud. Currently, the issues related to the avoidance of double taxation between Hungary and Switzerland are regulated by an international contract concluded in 1981, one of Hungary’s oldest, still effective tax conventions, which however does not regulate the exchange of information.

As the new Convention signed today enters into force, the old one will be terminated. The new Convention enters into force and becomes applicable after the Parliaments of both countries have ratified it. The new Convention concluded with Switzerland covers taxes on income and capital and regulates the authority of parties over the levying of taxes on certain incomes (dividend, interest, royalty, income from employment and other activities, etc.) and on capital, thus eliminating double taxation with regard to private persons, corporate income and capital.

The signing of this new tax convention, which is in accordance with the latest international legal standards and which fits well into current economic relations, creates a predictable economic environment for private persons and enterprises concerning bilateral relations, and it is the first significant step between Hungary and Switzerland towards broader exchange of information on tax issues.

(MTI)