Among member states Hungary’s 27% rate is the only VAT rate above 25%, Portfolio notes.

Yesterday’s decision means that member states have to establish a local VAT system with a weighted average tax rate of 12%.

The VAT system must have three rates depending on products: preferential rates of 0% and 5% and an ordinary rate of 15-25%.

A website will be created to provide information for SMEs on all VAT regimes within the union, to ease cross-border activities.

The suggestions approved by the EP will be discussed by the European Council, which must grant final approval.