The timeline
| When | What happened |
|---|---|
| 2020–2021, after Brexit | Interactive Brokers Central Europe (IBCE) opens in Budapest - one of three new EU hubs |
| July 2022 | The US gives notice terminating the 1979 US–Hungary tax treaty |
| December 2022 | The EU adopts the Pillar Two directive: a 15% minimum for groups above €750m |
| September 2023 | IBKR announces the consolidation of its EU operations into Ireland |
| 1 January 2024 | The treaty ceases to apply to withholding taxes |
| 2024 | IBCE clients migrate to Interactive Brokers Ireland (Dublin) |
Why Budapest in the first place
Hungary made sense on the inputs that mattered in 2020: an existing Budapest operation with people who knew the products, a Central and Eastern European client base served from inside the region, and the EU’s lowest corporate income tax at a flat 9%. The consolidation announcement itself confirms the logic - it stresses that the group will keep the Hungarian talent pool and the regional client focus even as the licence goes.[1][5]
The treaty shock
On 8 July 2022 the US Treasury notified Hungary that it was terminating the 1979 double-taxation treaty, weeks after Hungary had blocked the EU directive implementing the 15% global minimum tax. For withholding taxes, the treaty ceased to apply on 1 January 2024.[2][3]
For a US-owned broker whose clients live on US securities, that is close to disqualifying. Hungarian-resident clients saw the US withholding on their US dividends jump from the treaty’s 15% to the statutory 30%, and the Hungarian entity itself lost treaty protection on its own US-source income. An EU hub with no US treaty is a strange home for a business whose product is access to the US market.[3]
The minimum tax evened the field
From 2024 the EU Pillar Two directive tops up the tax of groups with revenue above €750m to 15% in every member state. Interactive Brokers is far above the threshold, so Hungary’s 9% stopped being 9%, and Ireland’s 12.5% stopped being a disadvantage. With the rate gap erased, what remained were the frictions: a terminated US treaty and a financial transaction duty on the Hungarian side; the Central Bank of Ireland, an intact 78-treaty network and Europe’s post-Brexit brokerage ecosystem on the Irish side.[4][6][7]
The lesson
The official reason - consolidating three regulated brokerages into one - is real: every extra entity means an extra regulator, capital requirement and compliance stack. But the choice of which hub survived was decided by tax variables in which the headline rate played no part: treaty network, client-level withholding, transaction taxes and the global minimum. For any internationally connected business the rule generalises: run the numbers on the whole chain, not on the corporate rate.[1]
よくある質問
Did Interactive Brokers say tax was the reason for leaving Hungary?
No - the announcement cites the efficiency of consolidating European operations, and running three regulated brokers genuinely was expensive. The treaty termination and the arrival of the 15% minimum tax simply happened over the same two years and removed Hungary’s advantages.
What changed for clients when the US–Hungary treaty ended?
From 1 January 2024, US withholding on US-source dividends of Hungarian residents rose from the treaty’s 15% to 30%. Clients resident elsewhere were unaffected - their own country’s treaty with the US governs their rate.
Does Hungary’s 9% rate still matter after all this?
For groups below the €750m Pillar Two threshold it is still the EU’s lowest corporate tax. For large groups it is topped up to 15% anyway - which is why treaty quality and frictions, not the rate, decided this case.
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情報源
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