December 2018 / Bulgaria

On 7 December 2018, the National Revenue Agency published on its website the updated 2018 version of the manual on value added tax. The manual provides a detailed overview of the applicable legislation as well as numerous examples with comments by the authorities.

On 13 December 2018, an amendment to the Corporate Income Tax Act was published in the State Gazette. It provides that from 1 January 2019 an exemption from corporate income tax will be available for alternative investment funds created for the implementation of financial instruments on the basis of financing agreements within the meaning of article 38(7) of Regulation (EC) No 1303/2013 of 17 December 2013. This provision deals with investments in certain newly created entities.

On 30 November 2018, the Ministry of Finance published for public consultation a proposal for amendments to Regulations for the application of the Value Added Tax Act. The proposal includes the following main topics:

• new notifications that taxable persons should submit to tax authorities in specific cases in relation to the introduction of the threshold of EUR 10,000 for EU cross-border supplies of B2C digital services as of 1 January 2019;
• evidence (documents) required for applying 0% VAT for supplies meeting the immediate needs of vessels and aircraft used by airline performing chiefly international flights or trains in relation to international transport;
• additional details on the application of the postponed accounting of import VAT that should be possible as of 1 July 2019; and
• clarifications on the determination of the taxable base in special cases (e.g. free of charge supplies, personal use of business assets).

The public consultation will continue until 30 December 2018. Further developments will be reported when they occur.