Information exchange agreement between Hungary and the US
21 November 2018
The information exchange agreement between Hungary and the United States with respect to the automatic exchange of country-by-country reports (CbCR) was concluded on 25 October 2018. We consider it important to emphasize that this agreement alone does not absolve the relevant Hungarian companies having ultimate parent companies operating in the United States of the preparation and/or filing of CbCR reports. In fact, the aforementioned agreement specifies the future creation of another agreement between the competent authorities of the two countries, in which the scope, timing and method of the exchange of Country-by-country reports and further conditions of the cooperation are recorded.
Therefore, the Hungarian member companies may have a CbCR-related data reporting obligation, as long as there is no effective information exchange agreement regarding CbCR between the two competent authorities. Based on preliminary information, the respective agreement may be concluded in early December 2018. Thus, within the deadline (31.12.2018) it might be considerable to wait with the fulfillment of the CbCR filing and any potential data reporting obligations.
On the website of the Tax Authority, it is constantly updated that apart from the European Union, which other states Hungary has an effective agreement with regarding exchange of information. During the most recent update (19 November 2018), along with Costa Rica, Curaçao and Nigeria, China has also been included in the list, which may exempt several Hungarian firms from data reporting obligations.