Hungary VAT bill goes ahead without foodstuffs VAT cut
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.