On 8 July 2022, the United States (US) Treasury officially began the process of terminating the US-Hungary Tax Treaty (signed in 1979). According to the Treasury Press Release, termination of the Treaty is effective on 8 January 2023, and with respect to taxes withheld at source, the Convention shall cease to have effect on 1 January 2024. On 27 December 2022, the text of a joint statement between the US and Hungary (Statement) was posted on the Internal Revenue Service (IRS) Country-by-Country (CbC) Reporting Jurisdiction Status Table.
The Statement acknowledges that the 2018 Agreement on Exchange of Country-by-Country Reports is expected to terminate on 8 January 2023 and provides that the US and Hungary are in the process of negotiating an intergovernmental agreement and competent authority arrangement to allow for the automatic exchange of CbC Reports. Prior to entry into force of these agreements, the Statement outlines agreements reached with respect to exchange of CbC Reports for fiscal years commencing 1 January 2021.
In an IRS Chief Counsel Memorandum (CCA 202302011 (pdf)) dated 10 January 2023, the Government concluded that cryptocurrency that has declined in value – even to less than a penny per unit – is not considered a deductible Internal Revenue Code 165 worthless loss if the taxpayer took no action to abandon the property right. According to the facts, the cryptocurrency continued to be traded on at least one exchange and the IRS noted that it “had liquidating value, though it was valued at less than one cent at the end of 2022.”
The Organisation for Economic Co-operation and Development announced on 13 January that former US Treasury official Manal Corwin will become director of the Centre for Tax Policy and Administration (CTPA), replacing Grace Perez-Navarro who will retire on 31 March. Perez-Navarro, who was the deputy director of the CTPA, became the director after long-time head Pascal Saint-Amans left the position in October 2022.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (United States), International Tax and Transaction Services, Washington, DC
Arlene Fitzpatrick
- Joshua Ruland
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
