A Glimpse at Taxation and Investment in Bulgaria 2022

Tax and Investment Facts A Glimpse at Taxation and Investment in Bulgaria 2022   A concise guide to doing business in Bulgaria and to the Bulgarian tax system. Have all tax and investment facts at a glance.       This Tax Alert has been prepared by DELCHEV & PARTNERS for information purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Readers should not act upon this without seeking professional counsel.

Tax Measures for Tackling the Increasing Energy Prices in Bulgaria

Tax Measures for Tackling the Increasing Energy Prices in Bulgaria   In the wake of the energy crisis which caused the skyrocketing of fuel prices in Bulgaria the Bulgarian Parliament in its final hours before its probable adjournment and impending new elections adopted a number of tax measures aiming at reduction of consumer energy products prices. The measures are all intended to apply for limited periods of time.   Reduced 9% VAT rate on central heating and natural gas A reduced VAT rate of 9% shall apply from July 9, 2022 until July 1, 2023 to the following supplies: Central … Continue reading

Introduction of Reduced VAT rate on Certain Supplies as a Temporary Tax Measure

Introduction of Reduced VAT rate on Certain Supplies as a Temporary Tax Measure Following the temporary reduction of the VAT rate on certain supplies of goods and services due to the Covid-19 pandemic, the scope of the reduced rates was further expanded to encompass certain basic goods in an effort to overcome the effects of increased consumer prices and inflation. The measure is intended to apply for a limited one-year period.   Supplies subject to reduced 9% VAT rate A reduced VAT rate of 9% shall apply to the following supplies: Central heating; Natural gas.   Supplies subject to reduced … Continue reading

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of personal income tax on bank deposits interest   The final personal income tax on bank deposits interest has been repealed pursuant to an amendment published in State Gazette No. 17/01.03.2022.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

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

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

VAT Registration of Bulgarian Businesses

Bulgarian businesses are subject to VAT registration under specific rules. In this article you can find brief overview of the requirements for a VAT registration in Bulgaria as described by our VAT lawyers.  Mandatory VAT Registration for Taxable Turnover Any company making supplies of goods or services taxable in Bulgaria, thus accumulating a taxable turnover of BGN 50 000 (app. EUR 25 000) or more in the last 12 months, is obligated to register for VAT purposes in Bulgaria and start charging Bulgarian VAT of 20% on its supplies. The taxable transactions generating VAT-able turnover include not only domestic supplies of goods … Continue reading

VAT Registration of Foreign Businesses in Bulgaria

In the era of globalization and fast digitalization of the economy businesses could become international in a matter of a few clicks of the mouse and gain access to overseas markets for their goods and services instantly. What companies often underestimate or even forget is that the sale of goods and provision of services to buyers in other countries often creates an obligation for VAT registration either in their own country of establishment or in the country of destination. In this regard, here are the most common cases, where businesses must register for VAT purposes in Bulgaria. Our Bulgarian lawyers … Continue reading