Hungary to lower VAT on internet in two rounds
The Hungarian government is planning to lower the VAT on internet services from 27% to 18% as of 2017, and further to 5% as of 2018, Tamás Deutsch, the prime minister’s commissioner for the Digital Welfare Program, said this morning on state-owned all-news channel M1, according to reports.
The Hungarian government had shown commitment lately to reducing the VAT rate on internet services, even though EU Commissioner for Economic and Financial Affairs Pierre Moscovici asked the Hungarian government to postpone a reduction of VAT on provision of internet connections, in a letter sent to Hungarian Economy Minister Mihály Varga in mid-July.
Moscovici wrote that he supported the government’s intention to foster digitalization, but said current EU rules do not allow Hungary’s government to reduce the VAT on internet subscriptions. He added that the European Commission aims to change the related directive and introduce more flexible regulations, but these changes will materialize later than expected, so he requested a delay in the reduction.
The secretariat of the Digital Welfare Program, which is charged with aiding the country’s technological and digital development, confirmed in mid-August that the government would most probably reduce the VAT rate on internet services from 27% to 18%, as approved by the Hungarian Parliament in early June.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.