FROM THE OFFICE OF PUBLIC AFFAIRS

The United States and the Republic of Hungary have scheduled negotiations of a new income tax treaty. The negotiations are scheduled to take place in Budapest the week of March 5, 2001. The new treaty would replace the treaty currently in force between the two countries, which was signed on February 12, 1979.

There have been substantial changes in the tax laws of both countries during the past twenty-two years and the present treaty no longer adequately reflects current treaty policies of the U.S. and Hungary. The negotiations will be based on the U.S. and OECD model treaties. The treaty will deal with the taxation of income from business activities, investment, and personal services. It will contain provisions to avoid double taxation, ensure nondiscrimination, and prevent treaty shopping. It will also provide for exchange of information and other administrative cooperation between the tax authorities of the two countries.

The Treasury Department invites written comments from the public regarding the upcoming negotiations. Comments should be sent to Manal Corwin, Acting International Tax Counsel, Room 1000 Main Treasury Building, Washington, D.C. 20220. Comments may also be sent by fax to (202) 622-0646, or by e-mail to Manal.Corwin@do.treas.gov.