US, Hungary sign to end dual taxation

United States Ambassador to Hungary Colleen Bell and Minister for Human Resources Zoltán Balog signed an agreement on Tuesday to eliminate dual taxation of US and Hungarian citizens
as a result of the payment of social security taxes to both countries based on the same earnings. The US Embassy in Budapest said the agreement promotes equity and fairness for workers who divide their careers between the two countries.

Currently, US companies that employ US citizens in Hungary must contribute to both the US and Hungarian social security systems.  When the agreement takes effect, US and Hungarian employers and their employees will contribute to either the US or Hungarian social security system but not both.  On the American side alone this will result in about 500 US workers and their employers sharing in annual tax savings estimated at USD 20 million over the first eight years of the agreement.
It will improve social security protection for people who work in both countries. Currently, some workers who divide their careers between the two fail to qualify for social security benefits from either country because they do not meet minimum eligibility requirements. The agreement allows credits to be combined from both countries to qualify workers and their family members for pro-rated US or Hungarian social security benefits.  This option will result in about 10,000 new US and Hungarian beneficiaries after the first eight years.
Before the agreement can take effect, the US Congress and Hungarian Parliament must review it.  The US has similar social security agreements with 25 other countries, including Australia, Canada, Chile, Japan, Norway, South Korea, Switzerland, and many other countries in the European Union.