Dates of the deposit of instruments of ratification: 25th June, 2019 for India and 25th March, 2021 for Hungry.
Entry into force of the MLI: 1st October, 2019 for India and 1st July, 2021 for Hungry.
Unless it is stated otherwise elsewhere in this document, the provisions of the MLI have effect with respect to the Convention:
In India: (a) With respect to taxes withheld at source on amounts paid or credited to nonresidents, where the event giving rise to such taxes occurs on or after the first day of the taxable period beginning on or after 1st July, 2021; and (b) With respect to all other taxes levied by India, for taxes levied with respect to taxable periods beginning on or after the expiration of a period of six calendar months from 1st July, 2021.
In Hungry: (a) With respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving rise to such taxes occurs on or after 1 January 2022; and (b) With respect to other taxes, for taxes levied with respect to taxable periods beginning on or after 1 January 2022.
Notable inclusion and suspension:
1. Paragraph 1 of Article 6 of the MLI is included in the preamble of this Convention:
ARTICLE 6 OF THE MLI- PURPOSE OF A COVERED TAX AGREEMENT
Intending to eliminate double taxation with respect to the taxes covered by this 1[Convention] without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in this [Convention] for the indirect benefit of residents of third jurisdictions),
2. In ARTICLE 27- DIPLOMATIC AGENTS AND CONSULAR OFFICERS
Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special agreements.
The following paragraph 1 of Article 7 of the MLI applies and supersedes the provisions of this Convention:
ARTICLE 7 OF THE MLI – PREVENTION OF TREATY ABUSE
(Principal Purposes Test provision)
Notwithstanding any provisions of [the Convention], a benefit under [the Convention] shall not be granted in respect of an item of income if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of [the Convention].
