Hungary increases its VAT rate from 25% to 27% in 2012

The Hungarian VAT rate is set to rise in 2012 by 2% to 27% on 1 January 2012.  This follows a 5% rise in July 2009.

This will give Hungary the highest VAT rate in the European Union, and one of the highest in the world.  Whilst the European Union did attempt several years ago to restrict member countries from raising the VAT rates above 25%, this move failed to gain support.  The EU only has the power to set the minimum VAT rate, currently 15%.

The rise comes as Hungary attempt to bring down its deficit to near Euro currency levels of 3% of GDP.