October 2022 / Bulgaria

On 13 October 2022, the European Commission published a proposal authorising Bulgaria to exempt from VAT taxable persons whose annual turnover is no higher than the equivalent in national currency of EUR 51,130.

This authorisation would imply that Bulgaria derogates from article 287 of the VAT Directive (2006/112), by increasing the threshold from EUR 25,600 to EUR 51,130. This decision would be applicable until 31 December 2024 since, from that date, EU Member States are to adopt and publish the laws, regulations and administrative provisions necessary to comply with article 1 of Amending Directive to the VAT Directive (2020/285), which lays down simpler VAT rules for small enterprises. From 1 January 2025, EU Member States will be allowed to exempt from VAT taxable persons whose annual turnover does not exceed a threshold of EUR 85,000 or the equivalent in any given national currency.

The European Commission has published the proposal to accept the measure, since it is expected to reduce VAT obligations, administrative burdens and compliance costs for both small enterprises and the tax authorities and has a minimal impact on the total VAT revenue generated.

The Ministry of Finance has published a public consultation for implementing the provisions of the Amending Directive to the 2011 Directive on Administrative Cooperation in the Tax and Social Security Procedure Code.

The main proposed amendments are the following:

• introduction of a mandatory obligation for digital platform operators to report information on sellers who use the platforms to sell goods and provide certain services; and
• introduction of joint audits in cooperation with the competent authorities of other EU Member States, as well as the application of specific data protection procedures.

The proposed measures should enter into force on 1 January 2023.