A new comprehensive Double Taxation Convention between the United Kingdom and the Republic of Hungary was signed in Budapest on 7 September 2011.

The convention replaces the 1977 agreement and generally follows the OECD Model Double Taxation Convention. Important features include zero withholding rates for direct investment dividends and dividends paid to pension funds, a 10 per cent rate for portfolio dividends (with a 15 per cent rate for REITS); zero withholding tax on interest and royalties; and the latest OECD provision on exchange of information.

The text of the new Convention is available on the HMRC website at Tax Treaties – Signed/not in force and will be published as soon as it is presented to Parliament for approval. The Convention enters into force once both countries have completed their legislative procedures.