Delchev & Partners

3. Shorter Time Limits for VAT Refund

By virtue of the amendments shorter time limits for VAT refunds are introduced – the VAT subject to refund could be carried forward within the subsequent two, instead of formerly three, periods. The two-month carry-forward is applicable for VAT which became subject to refund in a tax period following 1 January 2010. The remainder for effective refund which could not be deducted should be refunded within 30 days from the date of filing of the last VAT return compared to the former 45-day term.

When the person has carried out during the last 12 months before the current month  zerorated taxable supplies which form more than 30% of all taxable supplies made by the person, the VAT is subject to immediate refund within 30 days following the submission of the VAT return and is not subject to carry-forward, as previously.

In case the VAT subject to refund is not refunded unreasonably or under repealed grounds (e.g. when a tax assessment act is repealed), the VAT should be refunded to the taxable persons together with the statutory interest, calculated from the date when the tax should have been refunded until the final refund regardless of the fact that in case of a tax audit the time limits for VAT refund are the deadline for the tax assessment act issue. This means that the interest shall be due as of the lapse of the 30-day term for refund and not from the date of the tax assessment act, as before.

4. New VAT Registration Obligations

With a view to the changes in the services place of supply rules a new obligatory VAT registration is introduced. Taxable persons who receive services with a place of supply in Bulgaria and who are liable to account for the VAT under the reverse-charge mechanism, are obliged to register for VAT purposes regardless of their turnover.

Taxable persons who are established for VAT purposes in Bulgaria and who supply services with a place of supply in another EU Member State are also liable to VAT registration.

The foreign persons who are established for VAT purposes in another EU Member State or in a third country which Bulgaria has mutual assistance arrangements with, are no longer

obliged to register for VAT purposes via a VAT agent and could register under the regular proceedings. The foreign persons could still voluntary opt for a VAT registration through a VAT agent.

5. Obligation to Declare an E-mail Address

All VAT registered persons are obliged to declare an e-mail address for correspondence with the National Revenue Agency provided that they have not already declared one before the Registry Agency. The deadline for declaring the address is 1 April 2010. If the deadline is not met, the VAT registration of the person could be terminated by the revenue authorities.

6. Invoicing Requirements

As of the entry into force of the VAT Act amendments it is no longer necessary to indicate the name of the person who drafted the invoice in the latter.

II. AMENDMENTS IN VAT REFUND PROCEDURE REGARDING PERSONS ESTABLISHED IN ANOTHER EU MEMBER STATE

As of 1 January 2010 the VAT refunds to persons established in another EU Member State are carried out under the provisions of the new Regulation No. N-9 of 16.12.2009 which revokes Regulation No. R-11of 2006. The new Regulation shall apply for VAT refund applications filed after 01.01.2010.

The new VAT refund rules are summarized in the below table:

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