Changes to the VAT Law in Bulgaria

Written by: Editor

Changes-to-the-VAT-Law-in-Bulgaria.jpgLast year, an amendment to the Bulgarian VAT law brought important changes for investors and company owners and their obligations when conducting business activities. The changes are meant to deal with tax fraud. The change applies to business owners who engage in economic activities involving fuel and fuel trade. Our lawyers in Bulgaria give you further details on these changes and are also able to provide other information about the tax laws in the country.

The changes to the VAT Act

The changes brought to the Bulgarian VAT Act target a specific sector: the supply of liquid fuels. Operators in this business sector will need to provide a collateral, valid for one year. It applies to natural gas, oil, kerosene, heavy fuel, gasoline, liquefied petroleum as well as other gaseous hydrocarbons. 
The collateral obligation is mandatory for taxable individuals when they produce taxable supplies of liquid fuels, as such:
- the supplies liquid fuels have a value that exceeds 25,000 BGN/month;
- the person that acquired the fuels did so through an intra-community acquisition and does not intend to use them for private consumption and their value also exceeds 25,000 BGN;
- the taxable person received fuels worth more than 25,000 BGN.
The value of the collateral is equal to 20% of the VAT base of the supplies, but in no case, it can be lower than 50,000 BGN. It may be provided in cash, government securities or bank guarantee.
Fuels are one of the main exports of Bulgaria, along with chemicals, machinery equipment, and various manufactured goods. One of the experts at our law firm in Bulgaria can give you details on the export licenses and requirements if you are interested in knowing more.

Taxation in Bulgaria

The Value Added Tax is an indirect tax that applies in Bulgaria for the provision of goods and services. The standard VAT rate is 20% and a reduced rate of 9% applies for hotel accommodation and services. Exports, as well as intercommunity supplies, are not taxed.
VAT registration is mandatory in Bulgaria for taxable turnovers that exceed 50,000 BGN.
Our lawyers in Bulgaria provide a wide range of legal services and work with local and foreign investors alike, irrespective of their chosen business field.
For more details on the tax laws in Bulgaria please do not hesitate to contact us.