The Swiss Federal Council announced the adoption of the proposal to approve the protocol to amend the 2012 income and capital tax treaty with Hungary on 22 November 2024. It implements the OECD’s minimum standards from the base erosion and profit shifting (BEPS) project with regard to double taxation agreements.
Specifically, the protocol of amendment contains an anti-abuse clause. This is intended to prevent those who are domiciled in neither Switzerland nor Hungary from claiming the benefits provided for in the DTA. The protocol of amendment also aims to improve the dispute resolution mechanisms.
However, it does not provide for any changes to the tax allocation rules.
The cantons and the business circles concerned have welcomed the conclusion of the protocol of amendment.
The protocol still has to be approved by parliament in both countries before it can come into force. Signed on 12 July 2024, it will take effect 30 days after the exchange of ratification instruments.
