Hungary to lower VAT on Internet services despite EU request
Hungary will reduce its value added tax (VAT) on Internet services from 27% to 18%, starting early 2017. Hungary’s decision counters a request by the European Commission (EC), which asked Hungary to postpone the tax cut, since it does not comply with the current rules of the EU. Although the EC lauded Hungary’s efforts towards digitalisation, Internet services are not among the products that can have a preferential VAT rate. The EC is looking to change this directive, yet these changes ‘may take place later than expected’.