BULGARIA: COVID-19 VAT IMPLICATIONS

BULGARIA– Update 29th June

Bulgaria Clarifies Reduced VAT Rate for Restaurant and Catering Services

As previously reported, Bulgaria has provided a temporary extension of the 9% reduced VAT rate to certain supplies from 1 July 2020 to 31 December 2021 due to COVID-19, including for restaurant and catering services. The National Revenue Agency has recently clarified the application of the reduced rate, including that it applies for dine-in restaurant services, as well as for dining areas in shopping centers unless the food is ordered for takeout (packaged for home consumption). It is also clarified that for catering, the reduced rate also applies when the delivery of food on site is accompanied by other services, such as the delivery of equipment (table, chairs, etc.) and serving. Supplies of food in pavilions, shops, and vending machines, as well as home deliveries, however, remain subject to the standard 20% VAT rate.

Source Credit – Orbitax

BULGARIA– Update 23rd June

Bulgaria Extending VAT and Duties Exemption on Imports of Goods to Combat COVID-19

On 17 June 2020, Bulgaria’s Council of Ministers approved an extension of the exemption from import duties and VAT provided on the import of goods needed to combat the effects of the COVID-19 pandemic (primarily medical products). Bulgaria’s exemption was implemented from 30 January 2020 to 31 July 2020 and will be extended to 31 October 2020. Approval from the European Commission is needed to formally implement the extension.

Source Credit – Orbitax

BULGARIA– Update 14th May

VAT cut for restaurants and hotels to take effect this year

A few hours after saying that value-added tax for restaurants and places of entertainment registered under the Tourism Act would be cut from 20 per cent to nine per cent as of the beginning of 2021, Bulgarian Prime Minister Boiko Borissov said that the cut would take effect this year.

However, the measure would be temporary and would stay in effect until the end of 2021, Borissov told a briefing in Parliament.

He said that the legislation would be tabled in the National Assembly on May 13, at which point it would become clear from what date the change was envisaged to take effect.

Borissov was speaking after meeting members of the parliamentary group of his GERB party and of minority coalition partners VMRO and NFSB.

This meeting resulted in the change from the move that he had announced after talks in the morning with representatives of Bulgarian restaurant and hotel associations.

Borissov reiterated that the VAT cut was vehemently opposed by Finance Minister Vladislav Goranov, who was against differentiated VAT rates.

Estimates are that the VAT reduction for restaurants and places of entertainment will cost 150 million leva (about 75 million euro) in lost revenue.

Borissov said that it was also proposed to reduce VAT on books to nine per cent. This reduction would be permanent, he said.

Source Credit – Sofiaglobe

BULGARIA– Update 12th May

Reduced VAT Rate to Support Restaurant and Catering Sector

A draft bill was submitted in the Bulgarian parliament on 4 May 2020 that would introduce a reduced VAT rate to support the restaurant and catering sector, which has been heavily impacted by the COVID-19 pandemic.

This includes a 9% reduced VAT rate for restaurant and catering services, with a temporary reduced VAT rate of 5% applied from 1 June 2020 to 31 December 2021 in order to help the sector recover more quickly from the effects of the pandemic. Such services are currently subject to the standard 20% VAT rate.

Source Credit – Orbitax

BULGARIA– Update 17th April

No easements in respect of VAT return filing or payment extensions have been announced and none are expected.

Source Credit – Accordance VAT

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