NW 19:13:01 19-11-2020
LN1910NW.126
POLITICS - PARLIAMENT - VAT ACT

Parliament Amends Tax Laws, Cutting
VAT Rate for Restaurant-Delivered Food
to 9 Per Cent


Sofia, November 19 (BTA) - Bulgaria's National Assembly passed
conclusively amendments to the Value Added Tax Act, reducing the
VAT rate for food cooked at and delivered by restaurants from
the standard 20 per cent to 9 per cent, effective between
December 1, 2020 and December 31, 2021.

According to another revision of the law, a person established
in the territory of the EU, registered for VAT and registered in
an EU Member State other than Bulgaria to carry out distance
sales of goods imported from third countries is now entitled to
deduct input tax according to the standard rules for goods
and/or services whose place of transaction is in the territory
of Bulgaria. A person who is not established in Bulgaria but is
registered in another EU Member State to apply a Union scheme, a
non-Union scheme or a scheme for distance sales of goods
imported from third countries and who has failed to charge VAT
for supplies whose place of transaction is in the territory of
Bulgaria will be liable to a fine.

By the Transitional and Final Provisions of the same bill, the
MPs amended the Corporate Income Tax Act, increasing the amount
of expenses on food vouchers that are exempt from tax on the
expenses on fringe benefits from 60 leva to 80 leva per month
and exempting from this tax expenses on contributions (premiums)
for supplementary social insurance and life assurance. BSP for
Bulgaria and Valeri Simeonov MP of the United Patriots moved for
an increase of tax-exempt food vouchers to 100 leva monthly,
but this motion was defeated.

The Income Taxes on Natural Persons Act was revised as well,
allowing natural persons to debit their annual tax base with an
aggregate maximum of 2,000 leva actually paid by them in labour
costs to natural or legal persons for home improvements and
repairs services.

The legislature supplemented the Labour Code, allowing civil
servants and municipal employee to sit on the boards of
commercial corporations for remuneration.

In the course of the debate, Parliament rejected motions by BSP
for Bulgaria for replacing the flat rate income tax by a
progressive tax system. BSP leader Kornelia Ninova argued that
this is needed in order to narrow the income gap. Alexander
Ivanov MP of GERB objected: "GERB is the political party that
has promised and has guaranteed that it will not increase taxes
for Bulgarian citizens. You [BSP] may propose tax hikes for
individuals and businesses as long as you wish, but we won't do
it."

Another motion that was turned down by the majority was to amend
the Accountancy Act, increasing the net sales threshold for a
mandatory independent audit of companies' annual financial
statements from 4 million to 6 million leva. The measure was
proposed by the United Patriots and BSP for Bulgaria. Valeri
Simeonov MP of the United Patriots explained that the idea was
to ease the administrative burden on smaller companies and
enable auditors to focus on the larger ones. RY/VE, LG

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