The 5% VAT rate after 31 December 2019

As to the pending issue of the preferential VAT rate of 5% for new residential properties, finally the new tax laws approved by the Hungarian Parliament in November 2018 will remain to ensure the reduced VAT rate of 5% in case the date of completion of the residential properties is after 31 December 2019, provided that certain conditions are all met on 31 December 2019.

Reform of the VAT system is welcomed by the European Parliament

The common value added tax (VAT) system plays an important role in Europe’s Single Market. VAT is a major and growing source of revenue in the EU, raising over €1 trillion in 2015, which corresponds to 7% of EU GDP. Recent studies have indicated that around €150 billion of VAT revenues goes missing every year due to problems with VAT collection and VAT fraud.