The U.S. IRS has published a joint statement with the competent authority of Hungary on the implementation of the spontaneous exchange of country-by-country (CbC) reports for fiscal years beginning in 2021. The joint statement with Hungary provides that CbC Reports for fiscal years of MNE Groups commencing on or after 1 January 2021 and before 1 January 2022 that are filed with the U.S. IRS will be spontaneously exchanged with the competent authority of Hungary pursuant to the 1988 Mutual Assistance Convention. Where a CbC report of a U.S. MNE group is exchanged with Hungary, then none of the constituent entities of the Group will have a local filing obligation in Hungary.

Note that the U.S. and Hungary signed a CbC exchange agreement in 2018 but as noted in the latest agreement, the 2018 agreement is expected to terminate in accordance with its terms on 8 January 2023, which is 6 months after the U.S. notified Hungary of the termination of the 1979 tax treaty between the two countries. Although the treaty is terminated on 8 January 2023, the termination is not effective for withholding taxes and other taxes until 1 January 2024 (previous coverage).