Hungary’s Value Added Tax (VAT) system is one of the key revenue-generating mechanisms for the country. Notably, Hungary has the highest standard VAT rate in the European Union, alongside reduced rates for specific goods and services.
VAT Rates in Hungary
| VAT Rate | Percentage | Description |
|---|---|---|
| Standard VAT Rate | 27% | The highest VAT rate in the EU, applicable to most goods and services in Hungary. |
| Reduced VAT Rate | 18% | Applied to basic dairy and cereal products, making these essentials more affordable. |
| Reduced VAT Rate | 5% | Applies to medicines, medical equipment, books, certain animals and meat, as well as newly built houses and apartments (until 31 December 2022). |
Details on VAT Rates
- Standard VAT Rate (27%): Hungary’s standard VAT rate is 27%, the highest among EU member states. It applies broadly across goods and services, serving as a significant source of revenue for the government.
- Reduced VAT Rate (18%): The 18% rate is designated for essential food items like basic dairy and cereal products, aiming to lower the cost for consumers on these everyday necessities.
- Reduced VAT Rate (5%): This reduced rate applies to critical sectors such as healthcare and housing. It covers medicines, medical equipment, and books, as well as certain categories of animals and meat. The 5% rate also extends to newly built residential properties, but this benefit is scheduled to expire on 31 December 2022.
Purpose and Impact
Hungary’s VAT system is designed to:
- Generate Revenue: The high standard VAT rate ensures substantial revenue for public services and infrastructure projects.
- Support Essential Sectors: Reduced rates for food, healthcare, and housing demonstrate the government’s effort to make essential goods and services more accessible to the population.
- Promote Economic Stability: By applying lower rates to essential goods and services, Hungary’s VAT system aims to balance revenue generation with the economic well-being of its citizens.
Understanding the VAT rates in Hungary is crucial for businesses operating within the country and consumers to manage their expenses and ensure compliance with tax obligations.
What抯 Taking place i am new to this, I stumbled upon this I’ve discovered It absolutely helpful and it has aided me out loads. I am hoping to contribute & assist different users like its helped me. Good job.