Hungary VAT bill goes ahead without foodstuffs VAT cut

Fri 8th Nov 2013

The struggling Hungarian food industry seems to have failed in its attempts to have a cut in the reduced VAT rate on food included in the newly published Hungarian VAT Bill – out this week.

Hungary highest VAT rate in EU

Hungary is unusual in Europe in charging its standard VAT rate of 27% on most foodstuffs.  Certain dairy products attract a reduced VAT rate of 18%.  The compares to other EU member states which typically charge between 2% and 8% for foodstuffs.  In the UK VAT is zero %  on food.

The Hungarian VAT rate on foodstuffs was raised to 18% and 27% a number of years ago during the height of the financial crisis.  Hungarian VAT rose to 27% in 2012, and is now the highest VAT rate in the EU.  There has also been on-going discussion about creating a ‘luxury’ Hungarian VAT or duty rate of 32%.

Industry lobby groups still believe they may be able to have the Bill amended as it passes through Parliament.  They have been campaigning for a VAT rate of between 5% and 10%.

One concession that has been granted is a reduced VAT rate on the provision of live pigs.