Hungary

This Convention applies to persons resident in one or both Contracting States.

1. This Convention shall apply to income and property taxes payable by each Contracting State or its political subdivisions or local entities, irrespective of the levy system.

2. Taxes on income and property are those which tax all or any part of the income or property, including taxes on profits resulting from the disposal of movable or immovable property, taxes on the amount of wages or salaries paid by the Companies, as well as taxes on capital gains.

3. The current taxes to which this Convention specifically applies are, in particular:

(a) In Spain:

(i) The Income Tax of Physical Persons.

(ii) Corporate tax.

(iii) The property tax.

(hereinafter referred to as ‘Spanish tax’).

(b) In the People ' s Republic of Hungary:

(i) Income taxes.

(ii) Tax on Benefits.

(iii) Special Company Tax.

(iv) Housing Tax.

(v) Land Tax.

(vi) Contribution to municipal development.

(vii) The levy on dividends and distributed profits of Commercial Companies.

(hereinafter referred to as ‘Hungarian tax’).

4. This Convention shall also apply to taxes of an identical or similar nature which are established after the date of signature of the Convention and which are added or replaced to current taxes. The competent authorities of the Contracting States shall communicate to each other any relevant amendments to their respective tax laws.

1. For the purposes of this Convention, unless the context of the Convention is different:

(a) the terms ‘one Contracting State’ and ‘the other Contracting State’ mean Spain or the People's Republic of Hungary, depending on the context.

(b) The term ‘person’ includes natural persons, companies and any other grouping of persons.

(c) The term 'Society' means any legal person or entity that is considered a legal person for tax purposes.

(d) The terms ‘Company of one Contracting State’ and ‘Company of the other Contracting State’ mean, respectively, an Enterprise operated by a resident of one Contracting State and an Enterprise operated by a resident of the other Contracting State.

(e) The term ‘national’ means:

(i) any natural person possessing the nationality of a Contracting State,

(ii) any legal person, Society of Persons or Association constituted in accordance with the law in force of a Contracting State.

(f) The term 'international transport' means any transport carried out by a ship, aircraft or road transport vehicle operated by an Enterprise whose place of effective management is located in one Contracting State, except where the ship, aircraft or road transport vehicle is operated only between two points situated in the other Contracting State.

(g) The term ‘competent authority’ means:

(i) in the case of Spain, the Minister of Economy and Finance, the Secretary of State for Finance, the Director-General of Taxation or any other authority to which the Minister delegates;

(ii) in the case of the People's Republic of Hungary, the Minister of Finance or his authorised representative.

2. For the application of the Convention by a Contracting State, any expression not defined in the Convention shall have, unless its context is in conflict with a different interpretation, the meaning attributed to it by the law of that State concerning the taxes which are the subject of the Convention.

1. For the purposes of this Convention, the term ‘resident of a Contracting State’ means any person who, under the law of that State, is subject to taxation in that State by reason of his domicile, residence, place of address or any other criterion of a similar nature. However, this term does not include persons who are subject to taxation in this State solely on the income they obtain from sources located in that State or on the property they possess in that State.

2. Where, under the provisions of paragraph 1, a natural person is a resident of both Contracting States, his or her situation shall be resolved as follows:

(a) This person shall be considered a resident of the Contracting State in which he has permanent housing. If it has permanent housing in both Contracting States, it shall be considered a resident of the Contracting State in which its centre of vital interests is situated.

(b) If it is not possible to determine the Contracting State in which that person has the centre of his or her vital interests or if he or she does not have permanent housing in any of the Contracting States, he or she shall be considered a resident of the Contracting State where he or she habitually lives.

(c) If he habitually lives in both Contracting States or does not live in either Contracting State, he or she shall be considered a resident of the Contracting State of which he or she is a national.

(d) If he is a national of both Contracting States or is not a national of either Contracting State, the competent authorities of the Contracting States shall decide the case by mutual agreement.

3. Where under the provisions of paragraph 1 a person other than a natural person is a resident of both Contracting States, he or she shall be considered a resident of the State in which his or her place of effective management is located.

1. For the purposes of this Agreement, the term ‘permanent establishment’ means a fixed place of business through which an Enterprise carries out all or part of its activity.

2. The term ‘permanent establishment’ includes in particular:

(a) A management headquarters.

(b) A branch office.

(c) One office.

(d) One factory.

(e) One workshop.

(f) A mine, an oil or gas well, a quarry or any other natural resource extraction site.

3. A construction, installation or assembly work only constitutes a permanent establishment if its duration exceeds twenty-four months.

4. Notwithstanding the provisions of this Article, it is considered that the term ‘permanent establishment’ does not include:

(a) The use of facilities for the sole purpose of storing, displaying or delivering goods or goods belonging to the Enterprise.

(b) The maintenance of a warehouse of goods or goods belonging to the Enterprise for the sole purpose of storing, displaying or delivering them.

(c) The maintenance of a deposit of goods or goods belonging to the Enterprise for the sole purpose of their processing by another undertaking.

(d) The maintenance of a fixed place of business for the sole purpose of purchasing goods or goods or collecting information for the Enterprise.

(e) The maintenance of a fixed place of business for the sole purpose of carrying out for the enterprise any other activity of an auxiliary or preparatory nature.

(f) The maintenance of a fixed place of business for the sole purpose of the combined exercise of the activities referred to in subparagraphs (a) to (e), provided that the whole activity of the fixed place of business retains its auxiliary or preparatory character.

5. Notwithstanding paragraphs 1 and 2, where a person other than an agent enjoying an independent status, to which paragraph 6 applies, acts on behalf of an Enterprise and habitually exercises in a Contracting State powers to conclude contracts on behalf of the Enterprise, the Enterprise shall be deemed to have a permanent establishment in that State in respect of all activities carried out by that person on behalf of the enterprise, unless the activities of that person are limited to those referred to in paragraph (4) and if they have been exercised through a fixed place of business, this place would not have been considered a permanent establishment, in accordance with the provisions of this paragraph.

6. An Enterprise is not considered to have a permanent establishment in a Contracting State merely because it carries out its activities through a broker, a general commissioner or any other agent enjoying an independent status, provided that such persons act within the ordinary framework of their activity.

7. The fact that a Company resident of a Contracting State controls or is controlled by a Company resident of the other Contracting State, or that it engages in activities in that other State (whether by permanent establishment or otherwise) does not in itself make any of these Societies permanent establishment of the other.

1. Income from immovable property (including income from agricultural or forestry holdings) located in the other Contracting State may be taxed in the other Contracting State.

2. The term ‘real property’ shall have the meaning attributed to it by the law of the Contracting State in which the property in question is situated. In any event, that term includes accessories, livestock and equipment used on agricultural and forestry holdings, rights to which the provisions of private law relating to real estate, the use of immovable property and rights to variable or fixed payments for the exploitation or concession of the exploitation of mineral deposits, sources and other natural resources apply; vessels, vessels and aircraft are not regarded as immovable property.

3. The provisions of paragraph 1 apply to income derived from direct use, lease or shareholding, as well as from any other form of exploitation of immovable property.

4. The provisions of paragraphs 1 and 3 also apply to income derived from the immovable property of an Enterprise and from the immovable property used for the exercise of independent work.

1. The profits of an Enterprise of one Contracting State may be taxed only in this State, unless the Enterprise carries out its business in the other Contracting State through a permanent establishment located therein. If the Enterprise does so, the profits of the Enterprise may be taxed in the other State, but only to the extent that they can be attributed to this permanent establishment.

2. Without prejudice to paragraph 3, where an Enterprise of one Contracting State carries out its activity in the other Contracting State through a permanent establishment situated therein, in each Contracting State, the profits it would have obtained from being a separate and separate Enterprise carrying out the same or similar activities under the same or similar conditions shall be attributed to that establishment and shall be treated entirely independently with the Enterprise from which it is a permanent establishment.

3. For the purpose of determining the benefit of the permanent establishment, the deduction of expenses incurred for the realization of the purposes of the permanent establishment, including management and general administrative expenses for the same purposes, shall be permitted, whether incurred in the State in which the permanent establishment is located or elsewhere.

4. As long as it is customary in a Contracting State to determine the profits attributable to permanent establishments on the basis of a sharing of the total profits of the Enterprise among its various parties, the provisions of paragraph 2 shall not prevent this Contracting State from determining the taxable profits in this manner; however, the method of distribution adopted shall be such that the result obtained in accordance with the principles contained in this article.

5. No benefit shall be attributed to a permanent establishment merely because it buys goods or goods for the Enterprise.

6. For the purposes of the preceding paragraphs, the profits attributable to the permanent establishment shall be calculated each year by the same method, unless there are valid and sufficient grounds for proceeding otherwise.

7. Where profits include income covered separately by other articles of this Convention, the provisions of those articles shall not be affected by those of this Article.

1. Profits from operating ships, aircraft or road transport vehicles in international transport may be taxed only in the Contracting State where the effective head office of the Enterprise is located.

2. If the place of effective management of a Navigational Enterprise is on board a ship, it shall be deemed to be in the Contracting State where the base port of the ship is located, and if there is no such base port, in the Contracting State in which the person operating the ship resides.

3. The provisions of paragraph 1 also apply to profits arising from participation in a pool, in a joint holding or in an international exploitation body.

4. With regard to this article, profits from the operation in international transport of a ship, aircraft or road transport vehicle include profits from the use, use or rental of containers and related equipment for the transport of containers used in the transport of goods and goods in international traffic.

When:

(a) An Enterprise of one Contracting State participates directly or indirectly in the direction, control or capital of an Enterprise of the other Contracting State; or

(b) The same persons participate directly or indirectly in the direction, control or capital of an Enterprise of one Contracting State and an Enterprise of the other Contracting State;

and in either case the two Companies are in their commercial or financial relations, united by accepted or imposed conditions that differ from those that would be agreed by independent Companies, the profits that would have been obtained by one of the Companies in the absence of these conditions, and which in fact did not occur because of them, may be included in the profits of this Company and subject to taxation accordingly.

1. Dividends paid by a Company resident of one Contracting State to a resident of the other Contracting State may be taxed in that other State.

2. However, such dividends may also be subject to taxation in the Contracting State in which the Company that pays the dividends resides and in accordance with the laws of that State, but if the recipient of the dividends is the beneficial owner, the tax thus required may not exceed:

(a) 5 per 100 of the gross amount of dividends if the beneficial owner is a Company holding directly at least 25 per 100 of the Company's capital which pays the dividends;

(b) 15 per 100 of the gross amount of dividends in all other cases.

The competent authorities of the Contracting States shall, by mutual agreement, determine how these limits are to be applied.

This paragraph does not affect the Company's taxation of the beneficiaries from whom the dividends are paid.

3. The term ‘dividends’, used in this Article, means the returns on shares, bonds or rights of enjoyment of the parts of mines, of the parties of founders or other rights, except credit rights, which permit participation in the profits, as well as the income of other shareholdings subject to the same tax regime as the income of the shares by the law of the State in which the company which distributes them resides.

4. The provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the dividends, resident of one Contracting State, exercises in the other Contracting State, of which the corporation that pays the dividends is resident, an industrial or commercial activity through a permanent establishment here located or provided independent work through a fixed base here situated with which the share generated by the dividends is effectively linked. In such cases, the provisions of article 7 or article 14 apply, as appropriate.

5. Where a Company resident of one Contracting State obtains profits or income from the other Contracting State, the other State may not require any tax on dividends paid by the Society, except to the extent that such dividends are paid to a resident of that other State or the share generated by the dividends is effectively linked to a permanent establishment or a fixed base situated in that other State, or subject the undistributed profits of the Society to a tax on them, even if the dividends paid or the undistributed profits consist, in whole or in part, of profits or income from that other State.

1. Interest from one Contracting State and paid to a resident of the other Contracting State may be taxed only in that other State.

2. The term ‘interest’, used in this Article, means income from claims of any kind, with or without mortgage guarantees or interest-sharing clauses on the debtor's profits, and in particular income from public funds and bonds or bonds, including premiums and lots attached to such securities. Penalizations for late payment are not considered as interest within the meaning of this article.

3. Paragraph 1 does not apply if the beneficial owner of the interest, resident of one Contracting State, exercises in the other Contracting State, from which the interest is derived, an industrial or commercial activity through a permanent establishment located in that other State or provides independent personal services through a fixed base situated therein, with which the claim generating the interest is effectively linked. In such cases, the provisions of article 7 or article 14 apply, as appropriate.

4. Where, on account of the special relations between the debtor and the beneficial owner of the interest or the interest between them and third parties, the amount of interest paid, having regard to the claim for which it is paid, exceeds that agreed upon by the debtor and the creditor in the absence of such relations, the provisions of this article apply only to the latter amount. In this case, the excess may be subject to taxation, in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

1. Fees from one Contracting State and paid to a resident of the other Contracting State may be subject to taxation in that other State only if that resident is the beneficial owner.

2. The term ‘royalties’ used in this Article means the quantities of any kind paid for the use or grant of a copyright on a literary, artistic or scientific work, including cinematographic films and films or tapes for radio or television broadcasting, patents, brands of manufacture or trade, design or model, plan, formula or secret procedure, as well as for the use or granting of use of industrial, commercial or scientific equipment, and for information relating to industrial, commercial or scientific experience.

3. The provisions of paragraph 1 do not apply if the beneficial owner of the royalties, resident of a Contracting State, exercises in the other Contracting State from which the royalties come an industrial or commercial activity through a permanent establishment located in that other State or provides independent personal services through a fixed base situated therein, with which the right or property for which the royalties are paid is effectively linked. In such cases, the provisions of article 7 or article 14 apply, as appropriate.

4. Where, on account of the special relations between the debtor and the beneficial owner or of those between them and third parties, the amount of the fees paid, taking into account the benefit for which they are paid, exceeds that agreed by the debtor and the beneficial owner in the absence of such relationships, the provisions of this article apply only to the latter amount. In this case, the excess may be imposed in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

1. Profits that a resident of one Contracting State obtains from the disposal of immovable property, as defined in article 6, located in the other Contracting State, may be taxed in that other State.

2. Gains from the disposal of movable property forming part of the Assets of a permanent establishment held by an employer of one Contracting State in the other Contracting State, or from movable property belonging to a fixed basis held by a resident of one Contracting State in the other Contracting State for the provision of independent work, including gains arising from the alienation of that permanent establishment (alone or with the Enterprise as a whole) or from this fixed basis, may be subject to taxation in that other State.

3. Profits from the disposal of ships, aircraft or road transport vehicles operated in the international transport or of movable property affected by the operation of such ships, aircraft or road transport vehicle may be taxed only in the Contracting State where the effective headquarters of the company is located.

4. Profits arising from the disposal of any property other than those referred to in paragraphs 1, 2 and 3 may be subject to taxation only in the Contracting State in which the transferor resides.

1. An income obtained by a resident of a Contracting State through the provision of independent personal services or other activities of an independent nature may only be taxed in that State, unless the resident normally has a fixed basis in the other Contracting State for the exercise of his or her activities. If it has such a fixed base, income may be taxed in the other State, but only to the extent that it is attributable to this fixed base.

2. The expression independent personal services includes, in particular, independent scientific, literary, artistic, educational or pedagogical activities, as well as independent activities of Doctors, Lawyers, Engineers, Architects, Dentistry and Accountants.

1. Without prejudice to articles 16, 18, 19, 20 and 21, salaries, wages and similar remuneration obtained by a resident of a Contracting State on account of employment may be subject to taxation in that State only, unless the employment is exercised in the other Contracting State. If the employment is exercised here, the remuneration received for this purpose may be subject to taxation in this other State.

2. Notwithstanding paragraph 1, remunerations obtained by a resident of one Contracting State on the basis of employment in the other Contracting State may only be taxed in the first Contracting State if:

(a) The recipient does not remain in total in the other State, for one or more periods, more than one hundred and eighty-three days during the fiscal year concerned;

(b) remuneration is paid for or on behalf of an employer who is not a resident of the other State; and

(c) Remuneration is not borne by a permanent establishment or a fixed basis which the employer has in the other State.

3. Notwithstanding the foregoing provisions of this Article, remunerations obtained on account of employment on board a ship, aircraft or road transport vehicle operated in international transport may be subject to taxation in the Contracting State where the place of effective management of the Enterprise is located.

Participations, attendance allowances and other similar remunerations which a resident of a Contracting State obtains as a member of a Board of Directors or Supervisory Board of a Company resident of the other Contracting State may be subject to taxation in that other State.

1. Notwithstanding the provisions of articles 14 and 15, any income which a resident of a Contracting State obtains from the exercise of his personal activity in the other Contracting State, as an artist of the spectacle; a theatre, cinema, radio and television actor, or a musician, or as an athlete, may be subject to taxation in that other State.

2. Notwithstanding Articles 7, 14 and 15, where the income derived from the activities of an artist or athlete personally and as such is attributed, not to the artist or athlete himself, but to another person, such income may be subject to and imposed in the Contracting State in which the activities of the artist or athlete are carried out.

3. Notwithstanding paragraphs 1 and 2 of this article, the above-mentioned income shall be exempt from taxation in the Contracting State where the activity of the artist or sportsman is carried out, provided that this activity is mostly financed by public funds of the artist or sportsman or that the activity is carried out within the framework of cultural agreements or other agreements concluded between the Contracting States.

Without prejudice to article 19, paragraph 2, pensions and similar remuneration paid to a resident of a Contracting State on account of previous employment may only be taxed in that State.

1. (a) Remuneration, excluding pensions, paid by a Contracting State or one of its political subdivisions or local entities to a natural person, for the purpose of services rendered to that State or to this subdivision or Entity, may only be subject to taxation in that State.

(b) However, such remuneration may be subject to taxation in the other Contracting State only if the services are provided in this State and the natural person is a resident of this State who:

(i) possesses the nationality of this State; or

(ii) has not acquired the status of resident of this State solely to provide the services.

2. (a) Pensions paid by a Contracting State or by one of its political subdivisions or local entities, either directly or from funds made up of a natural person for services rendered to that State or to this subdivision or entity, may only be taxed in that State.

(b) However, such pensions may be subject to taxation in the other Contracting State only if the natural person is a resident and a national of that State.

3. Articles 15, 16 and 18 apply to remuneration and pensions paid for services rendered within the framework of an industrial or commercial activity carried out by a Contracting State or one of its political subdivisions or local entities.

1. The amounts received to cover the costs of maintenance, study or training of a student or a trainees who is or has been immediately before arriving in a Contracting State resident of the other Contracting State and who is in the first State for the sole purpose of continuing his studies or training may not be subject to taxation in that State provided that they come from sources outside that State.

2. Notwithstanding articles 14 and 15, a student or intern referred to in paragraph 1 shall not be taxed in the first State, for a period not exceeding three years as a whole, for remunerations, not exceeding the annual figure of 250,000 pesetas in Spain or 60,000 florins in the People ' s Republic of Hungary, derived from the provision of services in the first State, provided that such services are related to his studies or practices or the remuneration thereof constitutes income necessary for his support, studies or practices.

1. Remuneration derived from scientific education or research by a natural person who is or has been immediately before arriving in a Contracting State resident of the other Contracting State and who is in the former State for reasons of teaching or scientific research in a university institution, higher education establishment or similar establishment shall be exempt from taxation in the former State.

2. Paragraph 1 does not apply to remuneration derived from education or research if such research or education is not carried out in the public interest, but in the particular interest of private persons or persons.

1. The income of a resident of a Contracting State, whatever its source, not referred to in the previous articles of this Convention may be taxed only in that State.

2. Paragraph 1 does not apply to income, excluding income derived from property defined as immovable in article 6, paragraph 2, where the beneficiary of such income, resident of a Contracting State, engages in an industrial or commercial activity in the other Contracting State through a permanent establishment situated therein or provides independent personal services through a fixed base equally situated therein, to which the right or ownership for which the income is paid is effectively linked. In such cases, the provisions of article 7 or article 14 apply, as appropriate.

1. Property consisting of immovable property covered by article 6 owned by a resident of one Contracting State and situated in the other Contracting State may be subject to taxation in that other State.

2. Property consisting of movable property forming part of the Assets of a permanent establishment of an Enterprise, or movable property belonging to a fixed base used for the provision of independent personal services may be taxed in the Contracting State in which the permanent establishment or fixed base is located.

3. Assets consisting of ships, aircraft and road transport vehicles operated in international transport, as well as movable property affected by the operation of such ships, aircraft or road transport vehicles, may be subject to taxation only in the Contracting State in which the effective head office of the Enterprise is located.

4. All other assets of a resident of a Contracting State may be subject to taxation only in that State.

1. In Spain double taxation should be avoided as follows:

(a) where a resident of Spain obtains income or possesses assets which, in accordance with this Convention, may be taxed in the People's Republic of Hungary, Spain shall permit:

(i) as a deduction from the income tax of that resident an amount equal to the tax paid in the People's Republic of Hungary.

(ii) as a deduction from the property tax of that resident, an amount equal to the property tax paid in this other State.

However, in either case, this deduction may not exceed the part of the Income Tax or the Property Tax calculated before the corresponding deduction, as the case may be, to the income or wealth that may be taxed in the People's Republic of Hungary.

(b) where, in accordance with any provision of the Convention, the income received by a resident of Spain or the assets he holds are tax-exempt in Spain, Spain may, however, take into account the exempt income or assets for the purpose of calculating the amount of the tax on the rest of the income or assets of that resident.

2. In the People's Republic of Hungary double taxation shall be avoided as follows:

(i) where a resident of the People's Republic of Hungary obtains income or possesses assets which, in accordance with the provisions of this Convention, may be taxed in Spain, the People's Republic of Hungary shall exempt such income or property without prejudice to paragraphs (ii) and (iii).

(ii) where a resident of the People's Republic of Hungary obtains income which, in accordance with Article 10, may be taxed in Spain, the People's Republic of Hungary shall deduct from the tax levied on the income of that resident a tax equivalent to the tax paid in Spain. However, this deduction may not exceed the part of the tax, calculated before the deduction, corresponding to the income obtained in Spain.

(iii) where, in accordance with any provision of the Convention, the income obtained by a resident of the People's Republic of Hungary, or the property held by him or her is exempt from taxation in the People's Republic of Hungary, the People's Republic of Hungary may, however, take into account the income or wealth of the rest of the income or property of that resident.

1. Nationals of one Contracting State shall not be subject in the other Contracting State to any taxes or obligations relating thereto which are not or are more burdensome than those to which nationals of that other State who are in the same conditions are or may be subject. Notwithstanding article 1, this provision also applies to nationals of any of the Contracting States who are not residents of any of them.

2. Permanent establishments held by an Enterprise of one Contracting State in the other Contracting State shall not be subject to taxation in that State in a less favourable manner than the Enterprises of that other State carrying out the same activities. This provision cannot be interpreted as obliging a Contracting State to grant to residents of the other Contracting State the personal deductions, allowances and tax reductions it grants to its own residents in view of their marital status or family burdens.

3. Companies of a Contracting State whose capital is, in whole or in part, directly or indirectly detained or controlled by one or more residents of the other Contracting State are not subject in the first State to any tax or obligation relating thereto which is not or is more burdensome than those to which they are or may be subject in the first State to any tax or obligation relating thereto which is not or is more burdensome than those to which other similar undertakings of the first Contracting State are or may be subject.

4. Unless the provisions of article 9 are applied; article 11, paragraph 4, or article 12, paragraph 4, the interest, royalties or other expenses paid by an Enterprise of one Contracting State to a resident of the other Contracting State are deductible, in order to determine the profits subject to taxation of this Enterprise, under the same conditions as if they had been paid to a resident of the former State. Likewise, the debts of an Enterprise of one Contracting State relating to a resident of the other Contracting State are deductible for the determination of the taxable assets of this Enterprise under the same conditions as if they had been contracted with a resident of the former State.

5. Notwithstanding the provisions of Article 2, the provisions of this Article apply to all taxes, whatever their nature or name.

1. Where a person considers that the measures taken by one or both Contracting States involve or may entail an imposition for him that is not in conformity with the provisions of this Convention, independent of the remedies provided for by the domestic law of those States, he may submit his case to the competent authority of the Contracting State of which he is resident or, if article 25, paragraph 1, to that of the Contracting State of which he is a national. The case shall be brought within three years of the first notification of the measure involving an imposition not in accordance with the provisions of the Convention.

2. The competent authority shall, if it finds the complaint well founded and if it is not in a position to adopt a satisfactory solution, make every effort to resolve the matter through an amicable agreement with the competent authority of the other Contracting State in order to avoid an imposition not in conformity with this Convention.

3. The competent authorities of the Contracting States shall endeavour to resolve difficulties or to dispel doubts arising from the interpretation or application of the Convention by means of an amicable agreement. They may also agree to avoid double taxation in cases not covered by the Convention.

4. The competent authorities of the Contracting States may communicate directly with each other in order to reach an agreement as set out in the preceding paragraphs. Where it is considered that such an agreement can be facilitated through personal contacts, the exchange of views may take place within a Commission composed of representatives of the competent authorities of the Contracting States.

1. The competent authorities of the Contracting States shall exchange the information necessary to implement the provisions of this Convention, or the national law of the Contracting States relating to taxes covered by the Convention, to the extent that the taxation required by that Convention is not contrary to the Convention. The exchange of information is not limited by Article 1. Information received by a Contracting State shall be kept secret in the same way as information obtained under the domestic law of that State and/or at the request of the State providing the information and shall be communicated only to persons or authorities (including courts and administrative bodies) responsible for the management or collection of taxes covered by the Convention, declaratory or executive procedures relating to such taxes or for the resolution of appeals relating to such taxes. These persons or authorities will only use these reports for these purposes. They may disclose such information in public hearings of the Tribunals or in court judgements.

2. In no case can the provisions of paragraph 1 be interpreted as obliging a Contracting State to:

(a) adopt administrative measures contrary to its legislation or administrative practice or those of the other Contracting State;

(b) to provide information that cannot be obtained on the basis of its own legislation or in the exercise of its normal administrative practice or that of the other Contracting State; and

(c) provide information revealing a commercial, industrial or professional secret or a commercial procedure, or information whose communication is contrary to public policy.

Nothing in this Convention shall affect the tax privileges of Members of Diplomatic or Consular Missions contained in general rules of international law or in the provisions contained in special agreements.

1. The Contracting Parties shall notify each other as soon as possible of compliance with the constitutional requirements for the entry into force of this Convention.

2. This Convention shall enter into force on the date of the last notification referred to in paragraph 1 and its provisions shall apply:

(a) in respect of taxes withheld at source, amounts accrued on or after 1 January of the calendar year following the entry into force of the Convention.

(b) in respect of other income or property taxes, taxes for the fiscal year beginning on or after 1 January of the calendar year following the entry into force of the Convention.

This Convention shall remain in force as long as it is not denounced by one of the Contracting Parties; each Contracting Party may denounce the Convention by diplomatic means at least six months' notice before the end of each calendar year, after a period of five years from the date on which the Convention enters into force. In this case, the Convention shall cease to apply:

(a) in respect of taxes withheld at source, amounts accrued on or after 1 January of the calendar year following the notification.

(b) in respect of other income and property taxes, taxes for the fiscal year beginning on or after 1 January of the calendar year following that of the notification.

In faith, the undersigned, duly authorized to do so, have signed this Convention.

Done at Madrid on 9 July 1984, in two original copies, in the English, Hungarian and Spanish languages, all equally authentic.

At the time of signing the Convention between the Government of Spain and that of the People's Republic of Hungary on the prevention of double taxation and tax fraud in respect of income and property taxes, the undersigned have agreed that the following clauses shall be an integral part of the Convention:

(1) It is understood that the term 'place of business' also includes a place of production.

(2) In relation to Article 7, where an installation, construction or assembly work constitutes a permanent establishment, only the benefits arising from the activity carried out on the construction, installation or assembly work may be attributable to the permanent establishment.

No benefit shall be attributed to the permanent establishment for the delivery of goods or goods, machinery or equipment, whether such delivery is made by the Company itself or by a third person.

(3) In relation to Article 8, the operation in the international transport of a ship, aircraft or road transport vehicle includes the activity of the International Transport Agencies and ancillary activities, in the case of bus transport between the city and the airport, provided that the above activities are closely related to international transport.

(4) Every two years from the date on which the provisions of the Convention enter into force, the competent authorities may review the quantities referred to in paragraph 2 of Article 20.

In faith, the undersigned, duly authorized, sign this Protocol.

Done at Madrid on 9 July 1984, in two original copies, in the English, Hungarian and Spanish languages, all equally authentic.

This Convention entered into force on 20 May 1987, the date of the last of the Cross Notes between the Parties, with notification of compliance with the requirements laid down in Article 29 of the Convention.

What is made public for general knowledge.

Madrid, November 17, 1987 – Technical Secretary General José Manuel Paz y Agüeras.