Mid-Year Tax Update

At the end of July 2023 the Bulgarian Parliament adopted the long-overdue 2023 State Budget Act and the 2023 State Social Security Budget Act together with some changes to the tax and social security legislation, many of which aim at tackling the grey economy and battling tax evasion. The 2023 budget acts were published in the Bulgarian State Gazette No. 66 dated 1 August 2023. Repeal of the zero excise on LPG, natural gas and electricity As of August 1, 2023 the zero excise rate on the following products was repealed: • LPG and natural gas used as motor fuels; … Continue reading

Tax Measures for Tackling the Increasing Energy Prices in Europe: An update from Austria, Bulgaria, Germany, Poland, Sweden, and the United Kingdom

In the wake of the energy crisis, the European Union and national governments have implemented various fiscal measures to relieve the strain on economies and help EU industries and citizens deal with rising energy prices. Tax is one of the most effective short-term solutions to level the playing-field whenever energy prices soar. By the end of 2022, the EU had introduced several temporary measures such as a “solidarity contribution” levied on the “surplus taxable profits” of companies in the oil, gas, coal, and refinery sectors; as well as a revenue cap on companies generating low-cost electricity from wind, solar, and … Continue reading

New permanently reduced VAT rates and extension of certain temporary reduced rates in Bulgaria as of 01.01.2023

Introduction of new permanently reduced VAT rates and extension of certain temporary reduced rates in Bulgaria as of 01.01.2023     At the end of 2022 the Bulgarian Parliament extended the period of the reduced VAT rates on certain supplies of goods and services and transformed some of the temporarily reduced VAT rates into a permanent measure. The amendments to the Value Added Tax Act were published in the Bulgarian State Gazette No. 102 on 23 December 2021 and come into force on 1 January 2023.   Supplies subject to reduced 9% VAT rate What was initially adopted as a … Continue reading

Higher VAT registration turnover for businesses established in Bulgaria in 2023

Higher VAT registration turnover for businesses established in Bulgaria in 2023   As of 1 January 2023 taxable persons established in Bulgaria will be subject to a mandatory VAT registration when they reach a taxable turnover of BGN 100 000 (EUR 51 130) for a period encompassing the current month and 12 consecutive month prior to the current month. The VAT registration turnover doubles compared to the BGN 50 000 (EUR 25 565) threshold which applied before the amendment. The significant increase in the turnover requiring a VAT registration is designed as a tax relief measure for SMEs which now … Continue reading

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 … 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