December 6 2019

Amendments to various tax acts gazetted – Value Added Tax Act

Source: IBFD Tax Research Platform News

On 6 December 2019, amendments to various tax acts were published in the State Gazette. Amendments to the Value Added Tax Act (the VAT Act) are set out below. For other amendments,

The main changes relate to implementation of "quick fixes" for intra-Community trade within the European Union as provided in Council Directive (EU) 2018/1910 of 4 December 2018 amending Directive 2006/112/EC as regards the harmonization and simplification of certain rules in the value added tax system for the taxation of trade between Member States.

An overview of implemented rules that will apply from 1 January 2020 is set out below. In addition, other amendments to the VAT Act were also published in the State Gazette

Changes to the required evidence for application of the 0% VAT rate for intra-Community supplies

As from 1 January 2020, suppliers must obtain a document (e.g. invoice, protocol, etc.) for intra-Community supplies, as well as documents evidencing dispatching/transporting the goods to other EU Member States (as provided in article 45a of Implementing Regulation (EU) 282/2011) in order to apply a 0% VAT rate to an intra-Community supply. Other mandatory conditions for applying the 0% VAT rate to intra-Community supplies are as follows:

  • the recipient must provide to the supplier its VAT number issued by an EU Member State (different from Bulgaria); and
  • the intra-Community supply must be reported correctly in the VIES return (EC Sales List) of the supplier.

Introduction of call-off stock simplification rules and new reporting requirements in this respect

Currently, the call-off stock simplification is possible. Therefore, it is considered that an intra-Community supply and acquisition are taking place when the goods arrive at the warehouse of the recipient.

As from 1 January 2020, the new EU call-off stock simplification rules will be applied. As a result, an intra-Community supply/acquisition will be deemed to take place when the goods are removed from the warehouse by the recipient. Specific rules are introduced for cases of changing the recipient or when the goods are stored in the warehouse of the recipient for more than 12 months.

New reporting requirements are introduced for persons involved in a call-off stock simplification, as well as penalties for non-compliance with these requirements.

New rules for successive supplies (chain transactions) between EU Member States

Changes are introduced for successive supplies (chain transactions) within the European Union in order to establish rules for determining the transaction which should be considered as intra-Community supply subject to 0% VAT rate in the cases where an intermediary operator dispatches or transports the goods either himself or through a third party acting on his behalf.