Japan's Ministry of Finance has issued a notice announcing that the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) will be coming into force for the 1980 Japan-Hungary income tax treaty on 1 July 2021. Although the synthesized text of the treaty has not yet been prepared, a summary on the application of the MLI has been published, including that the MLI is generally effective for the treaty from 1 January 2022.

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Tax Treaties Covered by the Convention to Implement Measures to Prevent BEPS will be Increased [ Hungary ]

1. According to the publication as of March 25, 2021 by the Secretary-General of the Organisation for Economic Co-operation and Development (OECD) acting as the Depositary of the "Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting" (Convention to Implement Measures to Prevent BEPS), Hungary, being a party to one of the tax treaties of Japan to which it had chosen to apply this Convention, newly deposited its instrument of ratification of this Convention.

2. This Convention applies to an existing tax treaty where both parties to that tax treaty have chosen to apply this Convention to it and where this Convention has entered into force for those parties. The tax treaty between Japan and Hungary will satisfy those requirements on July 1, 2021.

3. The provisions of this Convention applicable to an existing tax treaty and the timing of entry into effect of this Convention for it are determined depending on the choices of each of the parties to that tax treaty.