Repeal of personal income tax on bank deposits interest
Repeal of personal income tax on bank deposits interest The final personal income tax on bank deposits interest has been repealed pursuant to an amendment published in State Gazette No. 17/01.03.2022. Repeal of final tax on bank deposits interest Bank deposits interest income received by natural persons was subject to a final tax on the gross interest income at the rate of 8%. The repeal of the interest tax was part of the tax policy plan of the new coalition government and by virtue of the latest statutory amendments the final tax was indeed abolished. Tax exemption … Continue reading
Changes to tax on employee benefits expenses
2022 Changes to tax on employee benefits expenses After discussing various alternatives for changing or even abolishing the tax on expenses related to the private use of company assets by employees, often referred to as “weekend tax”, the Bulgarian Parliament has finally settled on reducing the tax pursuant to an amendment published in State Gazette No. 17/01.03.2022. Expenses related to the private use of company assets The reduced tax rate concerns only in-kind expenses related to the private use of owned or rented company assets by its employees, directors and shareholders who work in the company. The in-kind … Continue reading
DLC – Countdown 11 – Vertical in the spotlight: Hardcore restrictions – Equivalence (EN)
“VERTICAL” IN THE SPOTLIGHT: HARDCORE RESTRICTIONS EQUIVALENCE GETTING READY FOR 1 JUNE 2022 AND EUROPEAN COMPETITION RULES CHANGE WHAT? Online sales restrictions are under close scrutiny from the European Commission and national competition authorities. It is well established that outright online sales bans are qualified as hardcore restrictions, which cannot benefit from the VBER. However, also with respect to other online sales restrictions businesses must tread carefully. For example, in a selective distribution system, brand owners may set online sales criteria in order to protect their brand when distributors are selling online. The European Commission provides that such criteria … Continue reading
DLC – Countdown 10 – Vertical in the spotlight: Hardcore restrictions – dual pricing (EN)
“VERTICAL” IN THE SPOTLIGHT: HARDCORE RESTRICTIONS – DUAL PRICING GETTING READY FOR 1 JUNE 2022 AND EUROPEAN COMPETITION RULES CHANGE WHAT? When a supplier or manufacturer charges different wholesale prices for the same product depending on whether the product is intended to be sold online or offline, or whether the buyer will sell it to a retailer or directly to end-customers, dual pricing is practiced. A dual pricing practice does not always qualify as a restriction of competition, although it is a valid presumption that this is the case where sales via the internet are disadvantaged. The underlying rationale for such … Continue reading
DLC – Countdown 9 – Vertical in the spotlight: Hardcore restrictions – resale price maintenance (EN)
“VERTICAL” IN THE SPOTLIGHT: HARDCORE RESTRICTIONS – RESALE PRICE MAINTENANCE GETTING READY FOR 1 JUNE 2022 AND EUROPEAN COMPETITION RULES CHANGE WHAT? Certain types of vertical restraints are particularly likely to hinder competition and harm consumers. These hardcore restrictions will not benefit from the safe harbour provided in the VBER and will often amount to an infringement of Article 101 TFEU. Resale price maintenance (“RPM”) constitutes a prime example of such hardcore or black-listed restrictions. RPM refers to vertical price fixing: a situation where, as a result of a vertical agreement, the buyer’s ability to set its resale price is … Continue reading
Reduced VAT rate on specialized milk formula and baby food till end of 2022 (EN)
Introduction of reduced VAT rate on specialized milk formula and baby food until the end of 2022 The scope of the reduced VAT rate which currently applies to certain baby foodstuffs was further extended pursuant to an amendment to the VAT Act published in State Gazette No. 14/18.02.2022. Supplies subject to the reduced 9% VAT rate The reduced VAT rate of 9% shall apply to specialized milk formulas (with partially hydrolyzed protein and those for children with allergies) and diet foods for special medical purposes intended for infants falling within CN codes 2106 90 92 and 2106 90 … Continue reading
DLC – Countdown 8 – Vertical in the spotlight: Hardcore restrictions general (EN)
“VERTICAL” IN THE SPOTLIGHT: HARDCORE RESTRICTIONS GENERAL GETTING READY FOR 1 JUNE 2022 AND EUROPEAN COMPETITION RULES CHANGE WHAT? Vertical agreements often contain a vast number of provisions, regulating different aspects of a vertical relationship. However, the EU competition rules determine that certain provisions cannot be included in distribution agreements since they impede competition to an extent that cannot be permitted. These are the so-called “hardcore restrictions”. Hardcore restrictions can be imposed both directly and indirectly, in which case the assessment is more complex, but the outcome is the same. Including a hardcore restriction in a vertical agreement has … Continue reading
Reduced VAT rate prolongation in Bulgaria due to Covid (EN)
Extension of the Reduced VAT rate on Certain Supplies until the end of 2022 With an eleventh-hour decision of 23 December 2021 the Bulgarian Parliament extended the term of the reduced VAT rate on certain supplies of goods and services which was introduced in July 2020 as a temporary measure to help the most affected businesses from the Covid-19 pandemic situation recover and which was initially meant to apply until 31 December 2021. Extended period of application of the reduced VAT rate The extended period of application of the reduced 9% VAT rate on the supplies listed below … Continue reading
DLC – Countdown 7 – Vertical in the spotlight: Non-compete restrictions – post term (EN)
“VERTICAL” IN THE SPOTLIGHT: NON-COMPETE RESTRICTIONS (POST TERM) GETTING READY FOR 1 JUNE 2022 AND EUROPEAN COMPETITION RULES CHANGE WHAT? Suppliers often provide commercial know-how to their distributors which they would not want to benefit their competitors. A critical situation in that respect is obviously the period immediately following the termination of a distribution agreement. The distributor is likely to switch to a competing supplier and there is a real risk that the distributor will share the know-how with his new supplier. In order to address this issue, distribution agreements may include a so-called post-term non-compete obligation. This obligation … Continue reading
DLC – Countdown 6 – Vertical in the spotlight: Non-compete restrictions (EN)
“VERTICAL” IN THE SPOTLIGHT: NON-COMPETE RESTRICTIONS GETTING READY FOR 1 JUNE 2022 AND EUROPEAN COMPETITION RULES CHANGE WHAT? Distribution agreements often contain non-compete clauses. They impose restrictions on a distributor’s ability to manufacture or sell products competing with the products covered by the distribution agreement, the so-called contract products. Let us make things concrete. A distributor is appointed to sell vacuum cleaners of brand A (the contract products). The non-compete restriction determines whether the distributor is allowed (and, if so, to what extent) to manufacture or sell vacuum cleaners of competing brand B or any other competing brand for … Continue reading
