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FinMin proposes VAT reduction for home renovation

The Finance Ministry has prepared a proposal to choose private home renovation and maintenance, and home care as the two service categories recommended for reduced VAT in line with European Union regulations, Finance Minister János Veres said.

  The government decision needs to be sent to the European Commission before the end of March, Veres said. A recent decision by the European Union allows each member state to choose two of five services categories - minor repairs, renovation and maintenance of private homes, home cleaning for private individuals, home care and hair dressing - for VAT cuts in an effort to promote employment. According to Veres, if the VAT on these two categories is reduced from the current 20% to the lowest 5%, it will result in an annual Ft 15 billion (€60 million) less VAT revenues, and if the 15% VAT rate is applied, it will result in a Ft 5 billion (€20 million) less VAT revenues.