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Changes in tax laws introduced by the Law on Amendment and Supplementation of the Law on the State Budget of the Republic of Bulgaria for 2022

July 11, 2022

Changes in tax laws introduced by the Law on Amendment and Supplementation of the Law on the State Budget of the Republic of Bulgaria for 2022


In State Gazette, issue 52 of 5 July 2022 a Law on Amendment and Supplementation of the Law on the State Budget of the Republic of Bulgaria for 2022 (LAS LSBRB) has been promulgated. This law introduces also changes in the tax laws as follows:

1. Individuals Income Taxation Act (IITA)

1.1 Changes have been made with respect to the tax benefits under Art. 22c and Art. 22d IITA (tax benefits for children and disabled children) by:

  • Increasing the amounts of the benefits (BGN 6,000 for a single child, BGN 12,000 for two children and BGN 18,000 for three and more children on annual basis, and for disabled children – BGN 12,000 on annual basis);
  • Creating possibility the tax benefit to be used in advance during the year. For the income under employment contract the deduction shall be made as follows:
    • From the monthly tax base (after deduction of the tax benefits for deficiency and for additional voluntary social security and health contributions) for July 2022 the tax benefit for the month January – June 2022 is deducted (BGN 500 for a single child, BGN 1,000 for two children, BGN 1,500 for three or more children per month, and for disabled children BGN 1000 per month);
    • The monthly tax base for October 2022 is decreased with the tax benefit amounts for July - September 2022;
    • For the months October – December 2022 the tax benefit is deducted at the time of annual adjustment;
    • In case the tax base for July and October 2022 is insufficient for deduction of the tax benefit, the employer shall reimburse 10% of the difference to the employee by the end of August 2022, respectively November 2022. The income tax of the employee for July and October 2022 in this case is zero. The employer will deduct the amount reimbursed to employees against liabilities for payment of IIT for subsequent periods;
    • The advance deduction of the tax benefits shall be applied for by the employees only once;
    • The limitations related to the use of the tax benefit remain in force, namely: (а) the tax benefit to be used by only one of the parents and the employer shall request a declaration from the employee that this requirement is complied with; (b) the tax benefit to be used only under one employment relationship, which is also evidenced with a declaration and/or a certificate issued by the second employer; (c) the other conditions under Art. 22c and 22d IITA to be complied with.
  • The self-insured individuals can also use the tax benefit and reduce the advance tax due as follows:
    • By decreasing the tax base for the second quarter with BGN 300 for a single child, BGN 600 for two children and BGN 900 for three or more children per month;
    • The reduction of the tax base for the third quarter is with BGN 150 for a single child, BGN 300 for two children and BGN 450 for three or more children per month.
    • The advance use of the tax benefit is not applied when the tax is withheld by the assignor.
    • The annual amount of the tax benefit is used at the time of submission of the annual tax return under Art. 50 IITA.
  • In case the requirement the tax benefit to be used by only one of the parents or with only one employer is breached, the right to the tax benefit is lost.

These provisions of LAS LSBRB enter into force on 1 July 2022 and remain effective until the end of 2022.


1.2 By means of 30 of LAS LSBRB Art. 29, para 1 IITA has been amended and the lawfully deductible expenses for income from exercising activity as lawyer are increased to 40%. This provision enters into force on 1 January 2023.


2. With respect to food vouchers

The amendment of § 1 of the Final and Transitional Provisions of the LSBRB provides a possibility the food vouchers to be used also for payment of tourist services.


3. Value Added Tax Act (VATA)

3.1 Zero tax rate has (with right to deduction of input VAT) has been provided for supplies on the territory of the country, import and intra Community acquisitions of bread and flour Respectively specific definitions have been created for these two types of goods: bread shall include bread made of different types of flour, with yeast or leaven, and flour is defined as limited only to flour from wheat (i.e. the flour from rye or other specific ingredients will be subject to taxation under the general rules). This rate shall apply from 9 July 2022 until 1 July

3.2 With respect to the restaurant and catering services a limitation was introduced: the reduced 9% tax rate not to apply to supplies of beer and wine. Until now the limitation was related only to spirits. This limitation enters into force on 9 July 2022, and the application of the reduced tax rate is until 31 December

3.3 The scope of goods and services to which the 9% reduced tax rate applies has been enlarged by adding the supplies of natural gas and central heating for the period from 9 July 2022 until 1 July

3.4 There is no change with respect to the other goods and services for which the reduced 8% tax rate was applied until now (books and textbooks, restaurant and catering services, food and hygiene articles for babies and young children, supply of general tourist service and the service for use of sports facilities) except those commented in s. 3.2 above. For these supplies the reduced tax rate shall apply until 31 December

3.5 Provision to arrange transitional case were introduced (tax event before the date of entry into force of the rate change and subsequent issue of invoice or adjustment of already issued tax documents). In these cases the tax rate that was in effect as at the date of the tax event shall be applied.


4. Excise and Tax Warehouses Act (ETWA)

4.1 As a temporary measure, for a period until 30 June 2025 a zero excise rate shall apply for the liquid petroleum gas (LPG) and natural gas, as well as for electricity produced from renewable energy sources. This treatment is conditional – if the European Commission finds a discrepancy with the provisions of the European law, after such discrepancy is found the previously applied excise rates shall apply again.

4.2 Reimbursement of the excise duty paid for electricity used by railway operators or operators of railway infrastructure, as well as by transport operators transporting people by metro, tramway or trolleybus was provided for.


5. Compensations for fuel

With LAS LSBRB a possibility and a procedure was provided for compensation of the price of purchased fuel (gasoline А95, diesel, LPG and natural gas) at the amount of BGN 0.25 per litter/kg at the time of direct fueling of a vehicle of М1 category and motorcycles of L category, owned by an individual or used by an individual. The compensations are provided by the final distributors (gas stations) and shall be stated as reduction of the amount due in the fiscal receipt issued. The fiscal receipt shall contain specific requisites and information. Afterwards the final distributor will receive the amount of the compensation from the state budget, through the NRA. The procedure and the requirements are described in detail in the law and additional information regarding the application is provided at website of NRA.  


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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