Hungary Reduces VAT Rate on Prescription Medicines and Compounded Preparations from 5% to 0%

Hungary has published Act XL of 2026 on amendments to the Value Added Tax (VAT) Act (Act CXXVII of 2007) in the Official Gazette. This includes the reclassification of prescription-only human medicines and official compounded preparations (magistral formulas) from Annex 3 (the 5% reduced VAT rate schedule) to Annex 3/B (the 0% VAT rate schedule). The change is effective 1 September 2026 and is meant to alleviate financial burdens on lower-income households, the elderly, and chronically ill p…