✓ The amendments to VAT are aimed at introducing requirements imposed by European Union law, as well as improving tax legislation.
- In fulfillment of the obligation to introduce European law into VAT, proposals have been made to create provisions for special regimes for small businesses - the domestic small business regime and the European Union (EU) small business regime to enable small businesses established in Member States other than the one in which the VAT is due to benefit from the exemption to charge VAT up to the registration threshold. In relation to the proposed changes imposed by the introduction of the provisions of Council Directive (EU) 2020/285 of 18 February 2020 amending Directive 2006/112/EC regarding the common system of value added tax in relation to the special scheme for small enterprises and Regulation (EU) No 904/2010 on administrative cooperation and the exchange of information for the purpose of monitoring the correct application of the special scheme for small enterprises, it is necessary to make changes to the general rules for VAT registration and de-registration. Given this, the bill proposed changes to the general rules for registration and de-registration under the VAT system.
- It is proposed to introduce an obligation to provide data on the available fixed assets and material stocks by the persons registered under the law. It is proposed that the data be declared at the end of a calendar quarter by VAT registered persons separately for the corresponding calendar quarter with the declaration under Art. 55, para. 1 of the Law on Personal Income Taxes and Art. 201, para. 1 of the Law on Corporate Income Taxation, by the end of the month following the quarter. The data will be provided from the current accounting records of the individuals and will cover the amount of fixed assets available with a tax base upon acquisition, production or import equal to or greater than BGN 5,000, valued at acquisition price and the sum of the total amount of available material stocks, valued in accordance with the applicable accounting standards, and for persons who are not enterprises within the meaning of the Accounting Law - the applicable accounting standards are the national accounting standards. The purpose of the proposal is to investigate all the facts and circumstances related to the exercised right of tax credit on the available fixed assets and material stocks, as well as to the existence of transactions concluded under conditions leading to a deviation from taxation.
- In order to ensure that the tax is charged in the Member State where the consumption takes place, it is necessary that all services that can be provided to a consumer electronically, broadcast live on the Internet or to which virtual access is otherwise provided, to be taxed at the place where the user is established.In this regard, the draft law proposes to change the definition of the place of performance of services related to activities broadcast live on the Internet or to which virtual access is otherwise provided.
- In connection with the entry into force of the new Commission Regulation (EU) 2023/2831 of 13 December 2023 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid in connection with the expiry of the Regulation (EU) No. 1407/2013 of the Commission of 18 December 2013, regarding the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid, amendments have been proposed related to the application of the special procedure for charging import tax for investment projects.
- In connection with the need for adaptation to the program period 2021-2027, including in relation to the function of the Fund Manager of financial instruments in Bulgaria as a performing "Holding Fund", the provision regarding VAT exemption for the supply of certain financial services has been updated.
- In order to bring the current legislation into line with the decision in the law and tax practice, it is proposed that the taxable turnover of taxable persons who carry out supplies of second-hand goods or supplies of a general tourist service should not be formed according to the special order of taxation of the margin, through the sum of the margins.