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Hungary's 2017 Budget Approved

by Ulrika Lomas,, Brussels

16 June 2016

The Hungarian Parliament has voted through the Government's Budget plan for 2017, including value-added tax (VAT) cuts on certain foodstuffs and services.

As a result of the 2017 Budget, milk, eggs, and poultry will be added to the list of products eligible for Hungary's five percent reduced rate of VAT. This measure would follow the recent addition of pork to the list.

In addition, under the Government's plans, VAT on restaurant services, which are currently subject to the 27 percent standard rate, will be reduced to 18 percent on January 1, 2017, and to 5 percent in 2018.

The budget also cuts VAT on internet services from 27 percent to the intermediate rate of 18 percent, although this measure may have to be cleared by the European Union.

The 2017 Budget leaves rates of personal and corporate income tax on hold. However, the plan includes an extension of family tax allowances, which the Government says will boost the income of a family with two children by an average of HUF60,000 (USD215) annually.

TAGS: VAT rates | tax | value added tax (VAT) | Hungary | budget | food | internet | services | Europe

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