Bulgaria: 2018 Proposal to amend VAT Act
In Bulgaria on 27th November 2018 the proposal for the amendments of the Value Added Tax Act was published.
Threshold for digital services introduction
With regards to the place of supply for digital services by EU suppliers to private individuals in EU Member States a threshold of BGN 19,558 (EUR 10,000) is introduced. Under the new rule, if the supplies of telecommunication, broadcasting and electronically supplied services in the current or previous calendar years are below this threshold, their place of supply will be where the supplier is established, provided that it is established in one of the EU Member States.
VAT rules for vouchers
Following the EU Directive (EU) 2016/1065, detailed rules regarding the VAT treatment of single-purpose and multi-purpose vouchers are introduced. The VAT rules are not going to be applicable to the following categories:
- instruments that entitle the owner to receive a discount when receiving goods/services;
- tickets for travelling, cinema, museums and other, as well as postal stamps, etc.; and
- food vouchers issued by a person with a permit issued by the Minister of Finance.
Postponed accounting to import VAT
VAT on importation must be paid upon importation of the goods to the custom authorities. Self-assessment is allowed only in a very limited number of cases (i.e. for large investment projects). From 1st July 2019, self-assessment of the VAT in the VAT return is going to cover aluminium, nickel, sulphur, tin, lead, zinc and organic chemical products. Additionally the following criteria are introduced – the goods declared in the customs document for self-assessment must have a customs value of at least BGN 50,000, and the importer must have no unsettled tax and social security liabilities.
Extension to applications for domestic reverse charge rules
Extension of the period for application of the domestic reverse charge rules for grain and technical crops is in effect.
The period for application of the said domestic reverse charge is extended to 30 June 2022.
An e-shop register is going to be created and maintained by the National Revenue Agency. All e-shops with activity in the country will be obligated to register in it.
Currently, in certain cases, suppliers and recipients of liquid fuels are required to provide to the tax authorities, collateral at an amount of 20% of the taxable base of the supply but not less than BGN 50,000. Under the amendments, the minimum required amount of BGN 50,000 will be abolished.
VAT zero-rated supplies – an extension to the list
The following supplies will be subject to 0% VAT rate:
- supplies for immediate needs of qualifying vessels and aircraft; and
- intermediary services related to international adoption under the Family Code.
VAT de-registration for companies in liquidation
The obligatory VAT de-registration for companies undergoing liquidations is no longer mandatory. Companies will be able to remain VAT registered until the end of the liquidation process.
Introduction of administrative simplification.
The following administrative simplification is to be introduced:
- an opportunity for VAT de-registration within 12 months after the beginning of the year following the voluntary VAT registration (currently, this period is 24 months);
- e-shops will be allowed to issue and send electronically fiscal receipts in cases where there is no physical contact between the seller and the buyer. It is envisaged that the rules for the issuing of electronic fiscal receipts will be provided in Ordinance N-18 of 2006 issued by the Ministry of Finance.
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