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June 19, 2020

Law on Amendment and Supplementation of the Value Added Tax Act

In State Gazette, issue 55 of 19 June 2020 Law on Amendment and Supplementation of the Value Added Tax Act (LAS VATA) has been promulgated. The amendments will enter into force on 1 July 2020.

The major amendments in the VATA are related to changes in the scope of supplies of goods and services which are subject to reduced tax rate of 9%. According to the VATA provisions effective until now the rate of 9% applies only to accommodation services in hotels or similar establishments, vacation accommodation and renting of camping sites. LAS VATA adds to the scope of the supplies subject to the rate of 9% also the following:

  • Supply of books on physical carriers or by electronic means (including textbooks, training aids, educational books, school sets, children books with pictures, . drawing books, etc.), but excluding editions with advertising content and editions where the content is mostly musical or audio-visual. The list is not exhaustive and allows interpretations, which will complicate the application of this provision and creates a possibility for subjective judgement regarding its scope;
  • Restaurant and catering services, which consist of supply of cooked and uncooked food, except for services, which consist of supply of alcohol beverages (beer, wine and spirits), including when they are subject to an ancillary supply. With respect to the definitions of beer, wine and spirits the new items 98, 99 and 100 of the Additional Provisions of VATA refer to the Excise and Tax Warehouses Act. The reduced rate for these services will be applied as a temporary measure for the period 1 July 2020 – 31 December 2021;
  • Baby and little children food (adapted baby milk, vegetable, fruit and mixed purée in packaging of up to 250 g) and baby diapers. In this respect a new Appendix 4 has been added to VATA. 

Besides, by the Conclusive provisions of the LAS VATA the minimum income for social security purposes for the hotel and restaurant sectors has been increased.

With the Conclusive Provisions of LAS VATA amendments have been made also to the Law on the Measures and Actions in State of Emergency for the following:

  • Granting a one-off aid to families whose children have been enrolled in eight class for the 2020 – 2021 school year. The aid is aimed for families where the average monthly income per capita for the preceding 12 months is below BGN 450 or that have disabled children, single parent or a child accommodated with relatives or reception family. The aid will be granted in two instalments – at opening of the school year and at the beginning of the second term. The aid should be refunded subject to certain conditions. The amount of the aid and the procedure for its granting will be determined by an ordinance of the Council of Ministers.
  • certain individuals that have been directly engaged in fighting the COVID 19 pandemic (medical staff, policemen, military, toll inspectors, etc.) will be provided with one-off aid for tourist services at the amount of BGN 210, which could be used for recreation for a term of at least 7 days in tourist sites until 30 November 2021. The terms and conditions for granting the aid have been regulated. 

This material is not exhaustive, but rather has general information nature and does not constitute specific advice or consultation. Should you have questions, do not hesitate to contact us at Tel. + 359 2 9433700, Fax + 359 2 9433707, e-mail: or at the following address: 1504 Sofia, 38, Oborishte Street.

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