Mária Lakatos

Taxation in General: Hungarian Tax System

The Hungarian VAT system

The Hungarian VAT system in its present form was introduced in 1988, by the time of the tax reforms. It was only in 2004 that some minor changes had to be implemented as a result of the EU accession. However a new act has been proclaimed in Hungary similarly to other EU member states, as the former so called 6th Directive was replaced by Directive 112/2005 on the common system of value added tax and the compliance with which was mandatory for each member state.[] The Directive determines for every member state the way of imposing the VAT, the place and date of the emergence of VAT payment obligation and classifies the products as ones falling into groups of standard tax rates or of reduced tax rates without prescribing the actual obligatory rates of VAT.

The Hungarian VAT system uses four different tax rates but, in addition to these there are the circles of personal exemptions and exemptions by the subject of the commodity or services. The standard VAT rate is 27 per cent. For dairy and mill products its rate is 18 per cent, and in the circle of products with reduced rate – such are, for example, the predominant part of medicaments, medicinal products and medical aids1 -, 5 per cent.

1	2007. évi CXXVII. törvény az általános forgalmi adóról. 3. számú melléklet (Annex 3 of Act CXXVII/2007 on VAT).

Taxation in General: Hungarian Tax System

Tartalomjegyzék

Kiadó: Akadémiai Kiadó

Online megjelenés éve: 2022

ISBN: 978 963 664 137 5

Taxation is a scheme for the state to provide revenue. The so collected money could then cover the public spending of the government. These are the so-called allocative and redistributive functions of the state budget. Although, taxation theory discusses the various tax types and analyses the various taxation tools very extensively, there is no absolute answer to the question, when and what type of taxation system would be optimal. Thus this introductory book on taxation deals with the three basic types of taxes - the income tax, the VAT and the corporation tax - in a very pragmatic way. There are legal texts and cases from both the international and also from the relevant Hungarian practice.

This book is recommended not only for students of economics but also for law students and practitioners beside anyone who is interested in the basic regulations of taxation.

Hivatkozás: https://mersz.hu/lakatos-taxation-in-general-hungarian-tax-system//

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