The MLI enters into force for Japan on January 1, 2019, and for Hungary on July 1, 2021.
Based on the reservations and notifications submitted by Japan on September 26, 2018 and by Hungary on March 25, 2021, the MLI applies to the tax treaty between Japan and Hungary as described below.
1. Tax treaty covered by the MLI
- “Convention between Japan and the Hungarian People’s Republic for the Avoidance of Double Taxation with
respect to Taxes on Income”
Date of signature: February 13, 1980
Date of entry into force: October 25, 1980
2. Provisions of the MLI applicable to the tax treaty
- Article 6(1) (Preamble language describing the intent of the Contracting Jurisdictions that the tax treaty will not
create opportunities for non-taxation or reduced taxation)
- Article 6(3) (Preamble language referring to a desire of the Contracting Jurisdictions to develop their economic
relationship and to enhance their co-operation in tax matters)
- Article 7(1) (Provisions that deny the benefits under the tax treaty where the principal purpose or one of the
principal purposes of any arrangement or transaction was to obtain those benefits)
- Article 17(1) (Provisions regarding corresponding adjustments to taxation in accordance with arm’s length
principle)
- Part VI (Provisions regarding arbitration for resolving a case of taxation not in accordance with the provisions of
the tax treaty)
- Article 19(12) (Provisions that provide that an unresolved issue arising from the case on which a decision has
already been rendered by a court or administrative tribunal shall not be submitted to arbitration)
- Article 23(2) (Provisions regarding the arbitration process in which the arbitration panel shall make its own decision
on the issues submitted to arbitration based on information provided by the competent authorities)
- Article 28(2)(a) (Provisions regarding the scope of cases eligible for arbitration)
3. Entry into effect
(a) The provisions of the MLI shall have effect in each Contracting Jurisdiction with respect to the tax treaty between
Japan and Hungary:
(i) with respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving
rise to such taxes occurs on or after January 1, 2022; and
(ii) with respect to all other taxes levied by that Contracting Jurisdiction, for taxes levied with respect to taxable
periods beginning on or after January 1, 2022.
(b) Notwithstanding (a), the provisions of Part VI (Arbitration) shall have effect:
(i) with respect to cases presented to the competent authority of a Contracting Jurisdiction (as described in
subparagraph a) of paragraph 1 of Article 19 (Mandatory Binding Arbitration)), on or after July 1, 2021; and
(ii) with respect to cases presented to the competent authority of a Contracting Jurisdiction prior to July 1, 2021
(only to the extent that the competent authorities of both Contracting Jurisdictions agree that Part VI
will apply to that specific case), on the date when both Contracting Jurisdictions have notified the Depositary
that they have reached mutual agreement pursuant to paragraph 10 of Article 19 (Mandatory Binding
Arbitration), along with information regarding the date or dates on which such cases shall be considered to
have been presented to the competent authority of a Contracting Jurisdiction (as described in subparagraph a)
of paragraph 1 of Article 19 (Mandatory Binding Arbitration)) according to the terms of that mutual agreement.
Based on the reservations and notifications submitted by Japan on September 26, 2018 and by Hungary on March 25, 2021, the MLI applies to the tax treaty between Japan and Hungary as described below.
1. Tax treaty covered by the MLI
- “Convention between Japan and the Hungarian People’s Republic for the Avoidance of Double Taxation with
respect to Taxes on Income”
Date of signature: February 13, 1980
Date of entry into force: October 25, 1980
2. Provisions of the MLI applicable to the tax treaty
- Article 6(1) (Preamble language describing the intent of the Contracting Jurisdictions that the tax treaty will not
create opportunities for non-taxation or reduced taxation)
- Article 6(3) (Preamble language referring to a desire of the Contracting Jurisdictions to develop their economic
relationship and to enhance their co-operation in tax matters)
- Article 7(1) (Provisions that deny the benefits under the tax treaty where the principal purpose or one of the
principal purposes of any arrangement or transaction was to obtain those benefits)
- Article 17(1) (Provisions regarding corresponding adjustments to taxation in accordance with arm’s length
principle)
- Part VI (Provisions regarding arbitration for resolving a case of taxation not in accordance with the provisions of
the tax treaty)
- Article 19(12) (Provisions that provide that an unresolved issue arising from the case on which a decision has
already been rendered by a court or administrative tribunal shall not be submitted to arbitration)
- Article 23(2) (Provisions regarding the arbitration process in which the arbitration panel shall make its own decision
on the issues submitted to arbitration based on information provided by the competent authorities)
- Article 28(2)(a) (Provisions regarding the scope of cases eligible for arbitration)
3. Entry into effect
(a) The provisions of the MLI shall have effect in each Contracting Jurisdiction with respect to the tax treaty between
Japan and Hungary:
(i) with respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving
rise to such taxes occurs on or after January 1, 2022; and
(ii) with respect to all other taxes levied by that Contracting Jurisdiction, for taxes levied with respect to taxable
periods beginning on or after January 1, 2022.
(b) Notwithstanding (a), the provisions of Part VI (Arbitration) shall have effect:
(i) with respect to cases presented to the competent authority of a Contracting Jurisdiction (as described in
subparagraph a) of paragraph 1 of Article 19 (Mandatory Binding Arbitration)), on or after July 1, 2021; and
(ii) with respect to cases presented to the competent authority of a Contracting Jurisdiction prior to July 1, 2021
(only to the extent that the competent authorities of both Contracting Jurisdictions agree that Part VI
will apply to that specific case), on the date when both Contracting Jurisdictions have notified the Depositary
that they have reached mutual agreement pursuant to paragraph 10 of Article 19 (Mandatory Binding
Arbitration), along with information regarding the date or dates on which such cases shall be considered to
have been presented to the competent authority of a Contracting Jurisdiction (as described in subparagraph a)
of paragraph 1 of Article 19 (Mandatory Binding Arbitration)) according to the terms of that mutual agreement.