Summary
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On 23 July 2026, Prime Minister Péter Magyar announced that Hungary will abolish VAT on prescription medicines from 1 September 2026, cutting the current reduced 5% rate to zero. It applies regardless of whether a medicine is subsidised by the Hungarian health insurance system, and stands in sharp contrast to Hungary’s 27% standard rate—the EU’s highest. The measure is the latest element of a large tax overhaul launched since the new government took office in May 2026. [dailynewshungary.com], [reuters.com]
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The government expects the change to reduce patient out-of-pocket costs, though the exact saving depends on pricing rules, insurance subsidies and whether pharmacies pass the full reduction through to retail prices. It should particularly help chronic-disease patients, the elderly taking multiple medicines, and those using newer, higher-priced treatments—improving medication adherence and long-term health outcomes. The Ministry of Finance estimates the cut will cost the central budget around HUF 7 billion (about EUR 19–22 million) annually. [dailynewshungary.com], [xpatloop.com]
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The prescription-drug measure sits within a broader package: the government is also planning to cut VAT on wood used for heating and on healthy foodstuffs (a larger budgetary item), and separately to abolish five minor taxes including the special municipal tax, dog-ownership contribution, immigration surtax and carbon-quota tax. Detailed legislation must still complete the parliamentary process and be promulgated, so precise application rules and dates should be treated as provisional until enacted. [dailynewshungary.com], [debrecensun.hu]
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