In Brief

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December 12, 2018


effective as from 1 January 2019


State Gazette issue 98 dated 27 November 2018 promulgated the Law on Amendment and Supplement to the Corporate Income Taxation Act (LASCITA), introducing amendments and supplements to the Value Added Tax Act (VATA). The changes are aimed at the harmonization of the domestic legislation with the provisions of the VAT directives, compliance with the ECJ practice, reduction of administrative burden for the business and citizens and precision of provisions that create difficulties in practical implementation.

This material summarises the most important changes.


1. Change in the tax treatment of transactions involving vouchers

These amendments (new Para 10 of Art. 26, Art. 131a-131c VATA and § 1, i. 88,89 and 90 of the Additional Provisions VATA) to the Bulgarian legislation transpose provisions of Council Directive 2016/1065 of 27 June 2016 for the amendment of Directive 2006/112/ЕC regarding tax treatment of vouchers. A differentiation has been made between two types of vouchers that enable the acquisition of goods or services:

  • Single-purpose vouchers; and
  • Multi-purpose vouchers.

A single-purpose voucher shall mean a voucher for which the place of supply and the applicable VAT rate for the supply of goods or services is known at the time of issue of the voucher. In the case of multi-purpose vouchers, one of these circumstances (place of supply or applicable VAT rate) is not known at the time of issue.

This difference also predetermines the different tax treatment:

  • Any transfer of a single-purpose voucher, if performed by a registered entity, shall be considered to constitute the supply of underlying goods or services and VAT shall be charged thereon. The provision of goods/services in return for the voucher itself shall not be treated as a separate supply unless the voucher issuer is different from the entity which provides the goods or services. In the latter case, it shall be considered that the provision of goods/services in return for the voucher constitute supply to the voucher issuer.
  • The transfer of a multi-purpose voucher, on the other hand, is not deemed to constitute a supply and shall not give rise to VAT accrual (in as far as the state where taxation shall take place and the amount of VAT to be charged is not clear). The VAT accrual obligation is postponed until the time of supply of goods or provision of services in return for the voucher.

The tax base of the supply of goods/services delivered in return for a multi-purpose voucher is the amount paid for the voucher. If this amount is not known the tax base is equal to the cash amount stated on the voucher or in the related documentation, without the VAT due.

VATA regulates also the case where a multi-purpose voucher has not been used during its term of validity and the amount paid is kept by the seller. It is expressly provided that the keeping of the voucher, respectively of the amount paid for it, is not deemed a supply in the meaning of VATA.

The scope of this specific treatment of vouchers excludes: (1) documents entitling the holder to a discount upon purchase; (2) tickets for travel, museum, cinema, theatre, etc.; (3) food vouchers.

The new treatment shall be applied for vouchers issued after 31 December 2018.


2. Change in the tax treatment of transactions of persons providing telecommunications, broadcasting or electronically supplied services

As the first stage of measures intended to modernize the overall VAT system, Directive 2017/2455 changes the approach to taxation of such supplies by persons who have low supply volumes.

With regards to legal entities incorporated in a single member state whose total value of supplies of electronic services to taxable persons in other member states for the current and previous year does not exceed EUR 10,000, the place of supply of electronic services shall be on the territory of the country where the supplier is established. Once the EUR 10,000 threshold is exceeded, the place of supply shall be the country in which the service recipient is established and the entity shall be obliged to register for special scheme within the Community or in accordance with the legislation of the respective member state. Until the threshold is reached, the entity may opt for the place of supply to be the country in which the service recipient is incorporated. The respective amendments have been made to Art. 97b and 97c of VATA. 


3. Tax base for supply of goods for personal use

The provision of Art. 27, Para 1 of VATA has been amended so as to eliminate a legislative omission and in connection with the failure of Bulgaria to implement Art. 74 and 76 of Directive 2006/112/EC that was found by the European Commission. Until now, the tax base for the supply of goods pursuant to Art. 6, Para 3 of VATA was equal to the tax base upon acquisition or the cost of the goods. Under the new edition of Art. 27, Para 1 of VATA, the tax base upon acquisition shall be reduced with the usual wear and tear according to the usual economic lifetime of the good. This tax base shall be determined as at the beginning of the month in which the good was set aside/supplied. The same treatment shall apply for the tax base of Intra-Community transactions under Art. 7, Para 4 of VATA.


4. Provisions regarding deduction of input VAT

The new Para 12 of Art. 66 of RAVATA (effective as of 13 July 2018) introduced the rule that upon adjusting the input VAT deducted, the period (20 years for real estate and 5 years for other goods) shall be suspended if the asset has not been used in the entity’s operation during the calendar year. The period shall start running again once the asset use is renewed. Now the same rule has been introduced to VATA (the new Para 8 of Art. 79a and Para 7 of Art. 79b of VATA).   


5. Tax payment for the last tax period

Changes have been introduced to the obligation for paying the tax for the last tax period. Until now, the tax due had to be paid following the general rules – by the 14th date of the month following the month of termination of registration, in as far as there was no special provision. By the new Para 2 of Art. 89 of VATA, this deadline has been amended and the obligation for payment of tax for the last tax period has been moved to the end of the month following the month in which the declaration report for the period should have been submitted.


6. Termination of registration

6.1. Until now, the provision of Art. 107, Para 4 of VATA imposed an obligation for termination of the registration of business entities upon discontinuing operations and initiating liquidation proceedings. This created difficulties and disputes, in as far as assets are sold and transactions are finalized during liquidation proceedings. The new amendments allow liquidators to decide if the entity will remain registered during the liquidation proceedings, until the date of deletion from Commercial Register. This decision is declared by submitting a declaration within 14 days from registering the liquidation. In this case, the liquidator shall be jointly and severally liable for the VAT amount due by the entity.

The entities whose operations have been discontinued due to liquidation before 31 December 2018, but whose VAT registration has not yet been terminated, may opt to extend their registration pursuant to VATA.

The changes have been introduced in order to comply with the ECJ practice and in particular with the decision under case С-552/16 (Wind Innovation 1 EOOD – in liquidation).

6.2. The period for which an entity voluntarily registered pursuant to Art. 100 of VATA should remain registered has been reduced from 24 months to 12 months.


7. Regulation of online retail

The new Para 19 of Art. 118 of VATA introduces mandatory registration of online shops and an obligation for them to submit data on sales executed pursuant to Ordinance No Н-18 of 13.12.2006. The registration and deletion in the public list of online shops and is to be regulated by amendment to Ordinance No Н-18, which the Minister of Finance shall issue within 6 months of the enforcement of LASCITA. Additionally, online shops may issue electronic receipts without storing a paper document, and send them to the customer electronically.


8. Postponed VAT charging for import

A new chapter 20a has been added to VATA, providing for the possibility for import of certain goods (explicitly listed in an Appendix) under postponed VAT charging conditions.

To be entitled to use the new treatment, several conditions need to be simultaneously fulfilled:

  • the customs value of each of the imported goods shall exceed BGN 50 thousand;
  • the entity shall have been registered at least 6 months before the import pursuant to Art. 96, Art. 97 or Art. 100 of VATA;
  • the entity shall have no due and outstanding public liabilities.

Under this treatment, VAT shall not be effectively paid at the time of import, but shall self charged by the entity in a protocol. The purchase and sales ledgers shall include the customs document certifying the import and the amount of the self charged tax.


9. The scope of supplies related to international transportation, subject to zero VAT rate, has been enlarged

In connection with ECJ decision on case С-33/16 the scope of supplies related to international transportation has been amended by adding the services related to meeting immediate needs of vessels and aircrafts.


10. Liquid fuel supply securities

The minimum amount requirement for security granted by persons performing supplies of Intra-Community acquisitions of liquid fuels has been repealed. Until now, the minimum amount of security to be provided pursuant to Art. 176c of VATA was BGN 50 thousand.

The persons who deposited a security which does not correspond to the amount of their supplies/Intra-Community acquisitions may request that the security be released. Within 30 days from submitting the request, NRA shall offset the security provided with existing public liabilities or repay the amounts to the entities.

The amendments shall be effective as of 1 January 2019.


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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