Hungary has announced the new tax related agreement with the Kingdom of Bahrain:
The DTT with the Kingdom of Bahrain was signed on 24 February 2014 and the related Act XLIX of 2014 was officially published on 30 October 2014.
Among others the new DTT determines the tax on dividends as follows:
(a) zero per cent (0%) of the gross amount of the dividends if the beneficial owner is a company (other than a partnership that is not liable to tax); and
(b) five per cent (5%) of the gross amount of the dividends in all other cases.
Furthermore the new DTT stipulates 0% withholding tax on interest and capital gains (i.e. these amounts are taxable only in the country where the beneficiary of the interest or the recipient of the capital gains is resident).
Hungary has announced the new tax related agreement with the Kingdom of Saudi Arabia:
The DTT with the Kingdom of Saudi Arabia was signed on 23 March 2014 and the related Act LII of 2014 was officially published on 30 October 2014.
Among others the new DTT determines the tax on dividends as follows: if the beneficial owner of the dividend is a resident of the other contracting state, the tax so charged shall not exceed five per cent (5%) of the gross amount of the dividends.
Furthermore, the new DTT stipulates 0% withholding tax on interest and capital gains (i.e. these amounts are taxable only in the country where the beneficiary of the interest or the recipient of the capital gains is resident).
The Agreement on Exchange of Information on Tax Matters with Jersey was signed on 28 January 2014 and the related Act L of 2014 was officially published on 30 October 2014.
The above agreements are not yet in force. They will become effective once the contracting countries have completed the ratification process.
Impact on investors: Hungary has progressed further with extending the circle of existing DTTs and information exchange agreements and to promulgate new ones. The related Acts (Act XLIX of 2014, Act LII of 2014 and Act L of 2014) were officially published however have not entered into force yet.