The VAT rate in Bulgaria has remained unchanged at 20% for many consecutive years. Recently, there has been a lot of debates on the future possibility of amending the VAT rate for certain food products as well as medicines and books to a rate somewhere in the range between 3% and 5%. While it remains to be seen what the Government will decide on this issue, we will focus our attention on the VAT legislation changes which had entered into force since the beginning of 2019.
The majority of the changes at the VAT legislation aim to implement the requirements of EU directives. Following Bulgaria's sentence in several big tax cases at the Court of the European Union it became necessary to amend the VAT legislation to avoid further court cases. Several European Court vs Bulgaria procedures are still ongoing, mostly because of discrepancies between the local and EU legislation. Furthermore, significant changes guarantee the decrease of the administrative burden on taxpayers and certain requirements are clarified in order to put an end to variable interpretations.
Since the beginning of this year, the law finally addresses electronic trade and online shops with a newly created possibility for issuing electronic fiscal bonds.
Another novelty is the fact that companies which had voluntarily registered for VAT purposes can now be deregistered voluntarily after 12 months since the beginning of the year, following the year of their VAT registration, unless they have meanwhile fulfilled requirements for obligatory VAT registration.
As of 01.07.2019, companies which import chemical and metallurgical goods in value exceeding BGN 50,000.00 (for each item, according to the tax declaration), will have the opportunity to self-calculate VAT for the import of goods instead of paying VAT for import to the customs authorities. To use this opportunity, the importing company should have registered under VAT requirements at least 6 (six) months before the import and should not have any due unpaid obligations towards the state.
A new threshold of EUR 10,000.00 per calendar year is defined for the provision of telecommunication services, radio and TV-services and services, provided electronically, under which the provider can charge VAT according to the Bulgarian legislation (i.e. place of supply will be considered to be the location of the supplier).
Given the wide spectrum of changes in the Bulgarian VAT legislation, we advise Bulgarian companies to seek competent and professional advice in understanding the implications of the amendments in their daily operations.
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