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January 5, 2023
Bulgaria amends VAT legislation
The Bulgarian National Assembly has adopted long-awaited amendments to the VAT Act.
The amendments, summarized below, introduce requirements of European legislation and bring the national legislation into line with the case law of the CJEU as well as addressing some practical issues.
Introduction of VAT bad debt relief
The right to adjust the taxable base in the case of total or partial non-payment of the supply by the customer (bad debt relief) has been introduced. This will allow a supplier who has not received payment from its customer to refund the tax charged and paid to the budget for the supplied goods or services. The new provisions regulate the rules for documenting the adjustment of the taxable base, the conditions for such an adjustment, exceptions, as well as the procedure for adjusting the tax credit deducted by the recipient.
Extension of the application of reduced VAT rates
Introduction of special rules for reporting export in cases where the supplier is not established in the territory of the EU
Special rules are provided for the declaration of the export of goods by a supplier not established in the EU. Due to the inability to meet some technical requirements, such suppliers have previously risked the non-application of the zero VAT rate to the export of their goods.
Introduction of rules for the deduction of VAT related to the correction of a tax document
Introduction of new reporting obligations for payment services providers
Amendments in certain rules concerning the provision of collateral for supplies of liquid fuels
Some deadlines in relation to the provision of collaterals for supplies of liquid fuels are changed. It is also envisaged that taxpayers who meet certain conditions shall provide a reduced amount of collateral, 10% (instead of 20%), of the tax bases of the taxable supplies, acquisitions, or the value of the received liquid fuels released for consumption for the previous tax period.
For additional information with respect to this Alert, please contact the following:
Ernst & Young Bulgaria EOOD, Sofia