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4th October, 2018

EP suggests VAT ceiling of 25%

The European Parliament yesterday approved a European Commission proposal to place a 25% ceiling on VAT in member states.

Among member states Hungary’s 27% rate is the only VAT rate above 25%, Portfolio notes.

Yesterday’s decision means that member states have to establish a local VAT system with a weighted average tax rate of 12%.

The VAT system must have three rates depending on products: preferential rates of 0% and 5% and an ordinary rate of 15-25%.

A website will be created to provide information for SMEs on all VAT regimes within the union, to ease cross-border activities.

The suggestions approved by the EP will be discussed by the European Council, which must grant final approval.

Sources regularly consulted, with abbreviations used in text: Népszabadság (N); Magyar Hírlap (MH); Világgazdaság (VG); Napi Gazdaság (NG); Magyar Nemzet (MN); Népszava (Nsz); Kossuth Rádió news (KR); nightly TV news (TV).

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