Hungary has amended its VAT Act to shift prescription-only medicines and magistral preparations from the 5% reduced VAT rate to a 0% rate from 1 September 2026, aiming to ease medicine costs for vulnerable groups.
Hungary has gazetted Act XL of 2026 amending the Value Added Tax Act (Act CXXVII of 2007) on 13 August 2026. The amendments reclassify prescription-only human medicines and officially compounded preparations (magistral formulas) from Annex 3.
The amendment introduces a major tax reclassification for human medicines, shifting them to a 0% VAT rate, starting 1 September 2026.
The amendment aims to support vulnerable groups by reducing the financial burden of essential prescription medicines, particularly for low-income households, the elderly, and people with chronic illnesses.
To transition these medical products from a 5% reduced VAT rate (Annex 3) to a 0% VAT rate (Annex 3/B), the amendment executes the following adjustments to Act CXXVII of 2007:
Changes to the VAT schedule
The amendment repeals rows 4 and 6 of Part I in Annex 3 (the 5% schedule) and modifies row 1, which covers authorized human medicines and imported non-commercial medicines. This row now explicitly excludes products redirected to the new zero-rate categories. The VAT Act simultaneously expands Annex 3/B with two additional rows establishing 0% taxation.
Expanded zero-rate categories
Row 2 of the new Annex 3/B designates prescription-only medicines for zero VAT treatment. Row 3 covers magistral preparations for human medical use—officially compounded formulas prepared in pharmacies — under the same 0% rate.
