Bulgaria: Bulgaria amends VAT Law

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Bulgaria: Bulgaria amends VAT Law

diallinas.jpg

Panayiotis Diallinas

Recent important amendments to the Bulgarian Law on VAT became effective on January 1 2017. The amendments are related to mixed supplies of assets and immovable property, the tour operator margin scheme, the obligation for VAT registration in cases of inheritance, and changes in the rules for supplies made by a person acting in his own name but for the account of another person.

A new model of proportional VAT deduction for mixed supplies has also been introduced. Besides the partial deduction applicable to the use of an asset for both taxable and tax-exempt supplies, a pro-rata deduction will be applied when these assets are used for both business and personal purposes. The proportion will be determined on the basis of reasonable criteria for allocating between personal and corporate use, according to the specifics of the asset. This deduction applies to:

  • Immovable property;

  • Transport vehicles (with the exception of those intended for use by disabled persons); and

  • Any other long-term assets with a value exceeding €2,500 ($2,600) (under the law for Cooperative Income Tax).

The amendment to Article 79 of the VAT Act introduces a new formula for the adjustment of the deduction of input VAT in cases of destruction or discarding of goods.

Furthermore, the amendments introduce a regime of annual adjustment (either upwards or downwards) in the event of a change in use of the asset. This will be completed by applying coefficients for the different types of assets and the adjustment will be carried out in the last tax period of the calendar year by drawing up a protocol for the adjustment and reflection of the change in the amount of the tax credit.

The amended Article 136, paragraph 3 of the VAT Act introduces a special tour operator margin scheme (TOMS) to supplies of single services by a tour operator to any person, including another tour operator or travel agent. The amendments stipulate a five-day period after the date of which an advance is refunded which is followed by the issuing of a credit note if the price is reduced or contract is terminated.

Amendments to the provisions concerning the actions of heirs upon death of a VAT-registered individual define what happens in case they continue the business activities. These persons are obligated to register under the VAT Act within six months of the death (new Article 132a of the VAT Act).

Additionally, from January 1 2017, if a taxable person acts in his own name but for the account of another person with respect to the supply of goods or services (such as a commission agent or mandatary), such person will be considered to have supplied/received the goods or services. In these cases, the date of sale/purchase of goods or services will be determined under general VAT rules but cannot be later/earlier than the date of the contract between the parties.

These changes in the Bulgarian Law on Value Added Tax are applicable from January 1 2017 and affect a wide range of VAT-registered persons.

Panayiotis Diallinas (panayiotis.diallinas@eurofast.eu)

Eurofast Bulgaria Office

Tel: +359 2 988 69 75

Website: www.eurofast.eu

more across site & shared bottom lb ros

More from across our site

Heads of tax need to push their teams forward as strategic business advisers to add value across the organisation, says Sandy Markwick
Scott Bessent reportedly felt undermined by Musk naming Gary Shapley as acting IRS commissioner; in other news, Baker Tilly will combine with a top 15 US firm
The promise of nine years’ tax certainty and a ‘rational and pragmatic’ government process makes APAs a no-brainer, Indian tax advisers tell ITR
Despite garnering significant revenues from multinationals, Italy’s digital services tax presents pressing double taxation issues, say Stefano Simontacchi and Francesco Saverio Scandone of BonelliErede
ITR’s research shows that in-house tax counsel in Asia also feel underserved by their advisers’ international networks
World Tax global head of research Jon Moore tells ITR how his team spots standout submissions, and gives early statistical insights into this year’s entries
Australia’s conservative opposition will repeal controversial tax agent reporting rules if elected in the country’s May general election
Shapley would be the fourth person to hold the job this year; in other news, UK tax advisory firm MHA raised fewer funds than expected from its London IPO
The US needs to be involved in pillar one for there to be more international acceptance of the project, Michael Masciangelo says
The UK regulator is investigating EY’s auditing of the national postal service as it relates to the high-profile Horizon scandal, which saw hundreds wrongfully convicted
Gift this article