VAT Registration Threshold to Increase
Bulgarian Economy Ministry is considering increasing the lower threshold for VAT registration from 50,000 BGN (25,000 EUR) to 200,000 BGN (100,000 EUR). Economy Minister, Bozhidar Lukarski, declared the measure was requested by inter-branch organizations and the authorities hope this would help Bulgarian small and medium-sized companies to exit the informal economy.
Why does Bulgaria consider the VAT registration threshold increase?
According to an EU Directive, the VAT registration threshold should be 100,000 euros. The Economy Minister declared that the 100,000 euros threshold is too high, but it would be discussed with the Finance Ministry. The Finance Ministry dismissed the idea, while the Economy Ministry supported the increase of the lower VAT registration threshold, seeing it as a measure to take Bulgarian companies out of the grey economic sector.
Bulgaria follows the EU regulations on VAT compliance, but the country may establish its own VAT rates as long as the standard rate is above 15% and it can also establish its registration threshold. Generally, VAT registration is required for all Bulgarian entities that supply VAT taxable goods that reach the 50,000 BGN registration threshold for 12 consecutive years. Bulgarian companies trading goods below the registration threshold can voluntarily choose to register for VAT.
Beside increasing the VAT registration threshold, the Economy Minister's plans include negotiations with foreign companies from China and Denmark that want to invest in new projects in Bulgaria.
The Bulgarian Ministry of Economy’s investment plans
The Economy Minister, Bozhidar Lukarski, declared that Chinese companies have shown great interest in investing in the Sofia Tech Park project and in the Trakia Economic Zone. He also declared that discussions on any potential investments in the Trakia region would end in June and Chinese companies are most interested in investing in the logistics sector. The Burgas, Vidin and Ruse industrial zones are also on the Economy Ministry’s list for large-scale investment projects.
Other sectors that have drawn the attention of Danish foreign investors are manufacturing and trading and the projects in the Bozhurishte area might begin this year.
With respect to foreign investments in 2015, the Economy Minister declared many foreign companies are interested in bringing their businesses to Bulgaria. Lukarski also mentioned that since he took office, partial reimbursement of social security expenses have been directed to investment projects thus generating the creation of 3400 jobs.