The Council of Ministers has submitted a proposal for amendments to the Value Added Tax Act (VAT Act) to the parliament. Among other things, it introduces a VAT bad debt relief.
The current VAT Act does not include an option for recovery of VAT by suppliers in situations of total or partial non-payment by their customers. The proposal, however, would introduce the "bad debt relief", which makes it possible, subject to certain conditions, for suppliers to recover the VAT paid into the budget on supplies for which they did not receive, either fully or partially, the payments from their customers.
As next steps, the proposal should be voted on at two readings by the parliament.
The full text of the proposal, issued on 31 October 2022, is available here (in Bulgarian only).