The National Tax and Customs Administration of Hungary issued a release on 3 June, 2024, concerning the Republic of Belarus’s decision to suspend certain provisions of the 2002 tax treaty between the two nations.
The suspension went into effect from 1 June, 2024, to 31 December, 2026.
The provisions that were suspended by Belarus include sections for the application of Articles 10, 11 and 13 of the tax treaty; pertaining to dividends, interests, and capital gains.
However, the release mentions additional provisions of the agreement, such as wage income, pensions, taxation of business profits, as well as procedural provisions (dispute resolution, exchange of tax information), which will not be affected by the suspension.
The release specifies that Belarusian suspension of the mentioned articles, the taxing rights of the Republic of Belarus regarding passive income from investments (dividends, interest, capital gains), will not be limited by the convention, i.e. the Belarusian party will apply its own domestic tax rate to the payments instead of the preferential withholding tax rates determined by the convention.
The release also emphasises that Hungary will enforce the provisions of the treaty to ensure its benefits. These benefits include restrictions of the right to tax, reduced withholding tax rates, and the avoidance of double taxation on income between Hungary and Belarus.
