Mária Lakatos

Taxation in General: Hungarian Tax System

Tax rates in VAT

Although a value-added type taxing is a must for the EU member states, the regulations are not strict with regard to the applicable rates thereof. Though the directive sets down that the lower rate must not be less than 14 %, it contains only a recommendation as to the higher limit, saying that preferably it should not be more than 25 %. Beside this, it also allows the use of two lower, i.e., reduced tax rates which, however, must not be less than 5 per cent.

In Hungary, we have 3 different VAT rates.

12. Table. VAT rates between 2013-2016

27 % VAT	(instead of the 25% VAT rate that was applicable in 2011, from 01 January 2012 a VAT rate of 27 % was introduced to the majority of products)
18 % VAT	milk, dairy products, bakery products
5 % VAT	newspapers, books, medical aids
- exempt from VAT	financial services

Source: www.nav.gov.hu

However, to take advantage of the reduced tax rates is only possible for those products that are specifically listed in the compiled versiosn of the VAT directive, i.e., Directive 112/2006 EU on VAT (EU Directive), Internet is not included in Annex 3, which means that the consent of Bruxelles is required.

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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