site.btaCabinet Approves Amendments to 2014 National Budget Act, VAT Act

Cabinet Approves Amendments
to 2014 National Budget Act,
VAT Act


Sofia, November 11 (BTA) - The government approved amendments to
the VAT Act and the 2014 National Budget Act on Tuesday,
Finance Minister Vladislav Goranov told a news conference.

The update proposal sets the budget deficit at 3.7 per cent of
the projected GDP and additional debt financing at up to 4,500
million leva until the year's end. The bill of amendments to the
2014 National Budget Act was posted on the Finance Ministry's
website on Monday evening.

To implement further consolidation measures targeting
expenditures, the cabinet withdrew a budget update bill
introduced into Parliament by the caretaker government, the new
bill says.

The government expects further savings of about 120 million leva
(0.2 per cent of the projected GDP) through savings by the
ministries and departments after their expenditures are
prioritized and optimized.

The new bill also includes legislative changes in the context of
the revoked licence of Corporate Commercial Bank. The Deposit
Guarantee Act is to be amended in order to avert attempts at
skirting the law, and to prevent a decrease in the bankruptcy
estate. That is why deposit guarantees will not apply to persons
who have acquired rights to a deposit as a result of
disposition transactions while the bank is under
conservatorship.

It is proposed that when determining if a privileged interest
rate applies to a deposit, the decision will be based on the
moment when the deposit contract is signed. Guaranteed deposits
will be paid through more than one bank.

The cabinet also proposes that the Health Ministry's budget
should increase by 43.6 million leva, and the budget of the
National Health Insurance Fund by 100 million leva, Health
Minister Peter Moskov said.

Some of the amendments to the VAT Act address the need to align
the national tax legislation to EU regulations and directives,
Goranov said. The Finance Ministry said that from January 1,
2015, all telecommunications, broadcasting, and electronic
services supplied by taxable persons established in the EU to
non-taxable persons established in the EU become taxable at the
place where the customer belongs. The aim is to share VAT
between the EU Member States where a company is established and
the Member States where the service is supplied.

The proposed amendments also transpose Regulation No. 360/2012
on the application of Articles 107 and 108 of the Treaty on the
Functioning of the European Union to de minimis aid granted to
undertakings providing services of general economic interest.

The bill envisages changes in the Excise Duties and Tax
Warehouses Act whereby the excise duty on cigarettes is
increased gradually. A time frame is proposed for reaching the
minimum excise duty rate of the equivalent of 90 euro per 1,000
cigarettes by December 31, 2017. The cabinet proposes that the
gradual increase should take place from January 1, 2016, 2017
and 2018. January 1, 2015 has been omitted due to problems with
increased smuggling, the Finance Minister said, adding: "It
would not be advisable to make this change before we have
managed to curb those processes and crack down on smuggling,
which increased dramatically in the last year and a half."

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