09/11/22

US: Biden administration rebuked over Hungary tax treaty termination.

As published on transferpricingnews.com, Tuesday 8 November, 2022.

Ranking Members of the United States’ Congressional committees have written to the US Treasury and the State Department to withdraw its termination of the long-standing tax treaty with Hungary.

The November 3 letter states that Treasury’s decision to unilaterally withdraw from a longstanding US tax treaty without any meaningful Congressional consultation is “particularly alarming.”

“Treasury’s actions suggest an impulsive attempt to pressure a country that has raised legitimate concerns with the agreement to fall in line,” it states.

The letter is written by US Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Finance Committee; US House Ways and Means Republican Leader Kevin Brady (R-Texas); and US Senator Jim Risch (R-Idaho), Ranking Member of the Senate Foreign Relations Committee.

The letter states: “The Joe Biden Administration must view the actions of countries like Russia and Belarus as more offensive than a country’s mere opposition to a global tax agreement that tax administrations and experts have openly questioned and criticized. The Administration’s inconsistent treatment of our current treaty partners further highlights the flaws in Treasury’s stated justification.”

“In its negotiations of the OECD global tax agreement, this Administration has repeatedly overstepped its bounds without appropriate Congressional consultation as part of its ‘at all costs’ approach. However, US tax treaties should not be used as a unilateral, retaliatory tool by an Administration to advance its domestic agenda,” it continues.

The letter calls upon the Biden administration to withdraw its termination of the tax treaty and promptly consult with Congress on a bipartisan basis to address any concerns with the tax treaty or any other of the United States’ current bilateral tax treaties.”

The Senate Finance Committee and House Ways and Means Committee have jurisdiction over tax matters, and the Senate Foreign Relations Committee has jurisdiction over treaties.