Hungary has increased its standard Value Added Tax rate from 25% to 27% from 1 January 2012. This indirect tax rise is to help stabilise the government’s rising deficit with the aftereffects of the 2007/08 financial crisis and the ongoing Euro currency crisis. The reduced rates of 5% and 18% will remain unchanged.
This leaves Hungary with the highest VAT rate in the European Union – the next highest is 25% in Sweden and Denmark. Hungary was already forced to hike VAT from 20% to 25% on 1 July 2009 in the midst of the global financial crisis.
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Many other European states have been forced into austerity VAT rate changes include: UK, Finland,Romania, Poland, Ireland, the Netherlands, France, Spain, Greece, Czech Republic.