site.btaSocial Partners Consider Tax Law Changes

December 6 (BTA) - The National Council for Tripartite
Cooperation (NCTC) met on Monday to discuss changes to the Value
 Added Tax Act, the Corporate Income Tax Act and the Excise
Duties and Tax Warehouses Act.

The proposed amendments to the VAT Act were not supported by all
 NCTC members. The draft revisions to this law are aimed to
transpose several EU directives into national law. One of the
directives concerns the temporary exemption of some imports from
 VAT amid the COVID-19 pandemic. Another one is about exemption
from VAT for goods and services intended to be used by the armed
 forces of the EU member states. Still another proposal is
designed to address discrepancies with the VAT Directive
(Council Directive 2006/112/EC of 28 November 2006 on the common
 system of value-added tax). The draft amendments are also aimed
 to align national VAT law with the case law of the Court of
Justice of the European Union. Some of the proposals are
intended to address problems with the practical implementation
of the law.

The Bulgarian Industrial Capital Association (BICA) backed the
VAT Act changes. Bulgarian Industrial Association (BIA)
President Dobri Mitrev said they support the VAT Act amendments
in principle. They insist that VAT on Bulgarian-made foods and
non-alcoholic beverages should be reduced from 20 per cent to 9
per cent. The Confederation of Employers and Industrialists in
Bulgaria (KRIB) did not support the proposed changes. KRIB's
Georgi Simeonov called for a more detailed discussion on some of
 them. The Union for Private Economic Enterprise (UPEE)
supported the proposals.

The Confederation of Independent Trade Unions in Bulgaria
(CITUB) objected to the bill. They argued that differentiated
VAT rates will not entail lower prices. They propose a standard
VAT rate of 15 per cent instead of 20 per cent. Vanya Grigorova
of the Podkrepa Confederation of Labour spoke against the
proposed revisions too. Grigorova said that the reduced VAT on
bar and restaurant services is like a present given through the
tax system.

The social partners also approved a bill to amend and supplement
 the Corporate Income Tax Act. The bill was presented by Deputy
Finance Minister Lyudmila Petkova, who said that one of the
changes has to do with the transposition of provisions from an
EU directive on the rules and disparities concerning hybrid
entities.

All employer organizations (BICA, BIA, the Bulgarian Chamber of
Commerce and Industry, KRIB and UPEE) supported the proposed
changes to the Corporate Income Tax Act without comment. The
trade unions did so as well.

The proposals for amending the Excise Duties and Tax Warehouses
Act were backed by all NCTC members except for KRIB. Deputy
Finance Minister Petkova explained that the bill seeks to
transpose several EU directives into national law. One of them
is Council Directive 2008/118/EC of 16 December 2008 concerning
the general arrangements for excise duty. Another one is Council
 Directive (EU) 2020/1151 of 29 July 2020 amending Directive
92/83/EEC on the harmonization of the structures of excise
duties on alcohol and alcoholic beverages. A third one is
Council Directive amending Directive 2006/112/EC on the common
system of value added tax and Directive 2008/118/EC concerning
the general arrangements for excise duty as regards defence
effort within the Union framework.

KRIB refrained from supporting the proposed changes to the
excise duty law, while UPEE backed them. CITUB approved of the
amendments. Podkrepa did no object either. MT/VE

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