Regarding social security, it is strange that although there will be no tax treaty between the two countries next year, the US-Hungarian social security treaty announced in 2015 will remain in force, because no one has denounced it.
The essence of the Convention, as stated in the introduction, is that although the social security rules of the country in whose territory the work is carried out apply to the employee as a general rule, in the event of deportation (if it does not exceed 5 years), the social security rules of the rules of the sending country apply to the employee as If the workplace had not changed. Furthermore, based on an additional rule, this could apply to an employee sent by a US parent company to a subsidiary in Hungary under certain conditions even if the subsidiary has entered into an employment contract and the overseas employment contract is suspended as a result, so the US and Insurance continues even in such a case.
Therefore, the termination of the Tax Treaty does not directly affect the insurance and therefore contribution payment obligations, so in order to obtain health care in Hungary, it will still be necessary for delegates working in Hungary to conclude a contract entitling them to health care during their stay in Hungary, provided that they remain Insured in the USA during the mission.
Serious changes are coming, but it is not too late to prepare
If an individual has US and Hungarian involvement, either based on his or her tax residency or where the income is generated (for example, because they work or have investments in both countries), it is useful to examine how their tax liabilities and tax burden will evolve next year.
In the case of benefits from long-term employment-based incentive programs, it is also very important to consider the consequences if stock or options vesting is opened after January 1, 2024.
The next part of the series of articles will continue with income from employee securities benefits and retirement programs, as well as income taxed separately.
