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Hungary VAT bill goes ahead without foodstuffs VAT cut

  • VAT
  • 07 November 2013 | Richard Asquith

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.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.