January 20 2022

Bulgaria Plans to Extend Scope of Reduced VAT Rate

Source: IBFD Tax Research Platform News

The Bulgarian parliament has approved at first reading the following amendments to the Value Added Tax Act:

  • implementation of Council Directive (EU) 2021/1159 of 13 July 2021 amending VAT Directive (2006/112) in response to the COVID-19 pandemic, and Council Directive (EU) 2019/2235 of 16 December 2019 amending EU VAT Directive (2006/112) and Excise Directive (2008/118);
  • introduction of rules for adjustments of incorrectly issued invoices even when a tax audit assessment notice has entered into force;
  • extension of the scope of application of the reduced 9% VAT rate by including specialized milk formulas (with partially hydrolyzed protein and formulas for children with allergies) and dietary foods for special medical purposes intended for infants (falling within EU code 2106 90 92 and EU code 2106 90 98);
  • inclusion of food vouchers within the scope of application of the special VAT rules for vouchers (currently, they are explicitly excluded from this scope); and
  • various clarifications concerning the new VAT rules for e-commerce applicable as from 1 July 2021 and the supplies of goods between Bulgaria and Northern Ireland.

As a next step, the proposal will be voted at second and final reading by the parliament.

The full text of the proposal, approved on 20 January 2021, is available here (in Bulgarian only).