Publication: Magyar Közlöny
Issue: MK-2010-32 (Year: 2010, Number: 32)
Era: contemporary
Section: szóló 1996. évi CXII. törvény 3. szakasz 1. bekezdésében felsorolt szolgáltatásokat, vagy bármely azt köve tõen
Paragraph Index: 935

9. With reference to paragraph 3) a) of Article 22 (Limitation on Benefits), it is understood that a resident of a Contracting State engaged in the active conduct of a trade or business in that State may obtain the benefits of the Convention with respect to an item of income derived in the other Contracting State under this paragraph if that item of income is derived in connection with or is incidental to that trade or business. The following example illustrates this result: HUCo is a company resident in Hungary. HUCo’s main function is the development of new drugs, and in carrying out this business HUCo operates a large research and development facility in Hungary. Once HUCo’s staff completes its research and the drugs are approved for sale, HUCo licenses the new drugs it develops to other members of its multinational group, including USCo, a company resident in the United States. USCo manufactures HUCo’s products in the United States, and pays royalties to HUCo with respect to the license agreements for the drugs that HUCo develops. HUCo is engaged in the active conduct of a trade or business in Hungary. The royalties paid by USCo are derived in connection with HUCo’s research and development activity. Therefore, assuming HUCo’s activities are substantial in relationship to the activities of USCo, as discussed in paragraph 10 below, HUCo is entitled to treaty benefits with respect to its U.S.-source royalty income.

Source: https://magyarkozlony.hu/hivatalos-lapok/07d27bff30d27e1e27043370e8724dee864f7353/dokumentumok/8bfaa15ae64877eb1eb8cd5a9ff7a0cc8831b8d5/letoltes