June 2020 / Bulgaria

Bulgaria’s National Assembly approved on June 10 the second reading of amendments to the Value-Added Tax Act, reducing the tax rate on restaurant sales, catering services, books, baby foods and baby hygiene products from 20% to 9%. The reduced VAT rate will be in effect between July 1, 2020 and December 31, 2021.

As a result of the COVID-19 pandemic, from 1 July, 2020 a temporary reduced 9% VAT rate for books and restaurant services will apply until 31 December, 2021. The National Revenue Agency has published the following clarifications for the application of the 9% rate for restaurant services:

• food zones in commercial centers will be allowed to apply the 9% VAT rate for food unless it is ordered for take away;
• catering services may also apply the 9% VAT rate when the supply of food is accompanied by other services; and
• supplies of food in shops and vending machines will remain subject to the standard 20% VAT rate.