site.btaParliament Amends Tax Laws, Cuts VAT for Restaurant-Delivered Food to 9 Per Cent

ESD 19:08:01 19-11-2020
LN1906ES.126
126 POLITICS - PARLIAMENT - VAT ACT

Parliament Amends Tax Laws, Cutting
VAT Rate for Restaurant-Delivered Food
to 9 Per Cent


Sofia, November 19 (BTA) - Bulgaria's National Assembly passed conclusively amendments to the Value Added Tax Act, reducing the VAT rate for food cooked at and delivered by restaurants from the standard 20 per cent to 9 per cent, effective between December 1, 2020 and December 31, 2021.

According to another revision of the law, a person established in the territory of the EU, registered for VAT and registered in an EU Member State other than Bulgaria to carry out distance sales of goods imported from third countries is now entitled to deduct input tax according to the standard rules for goods and/or services whose place of transaction is in the territory of Bulgaria. A person who is not established in Bulgaria but is registered in another EU Member State to apply a Union scheme, a non-Union scheme or a scheme for distance sales of goods imported from third countries and who has failed to charge VAT for supplies whose place of transaction is in the territory of Bulgaria will be liable to a fine.

By the Transitional and Final Provisions of the same bill, the MPs amended the Corporate Income Tax Act, increasing the amount of expenses on food vouchers that are exempt from tax on the expenses on fringe benefits from 60 leva to 80 leva per month and exempting from this tax expenses on contributions (premiums) for supplementary social insurance and life assurance. BSP for Bulgaria and Valeri Simeonov MP of the United Patriots moved for an increase of tax-exempt food vouchers to 100 leva monthly, but this motion was defeated.

The Income Taxes on Natural Persons Act was revised as well, allowing natural persons to debit their annual tax base with an aggregate maximum of 2,000 leva actually paid by them in labour costs to natural or legal persons for home improvements and repairs services.

The legislature supplemented the Labour Code, allowing civil servants and municipal employee to sit on the boards of commercial corporations for remuneration.

In the course of the debate, Parliament rejected motions by BSP for Bulgaria for replacing the flat rate income tax by a progressive tax system. BSP leader Kornelia Ninova argued that this is needed in order to narrow the income gap. Alexander Ivanov MP of GERB objected: "GERB is the political party that has promised and has guaranteed that it will not increase taxes for Bulgarian citizens. You [BSP] may propose tax hikes for individuals and businesses as long as you wish, but we won't do it."

Another motion that was turned down by the majority was to amend the Accountancy Act, increasing the net sales threshold for a mandatory independent audit of companies' annual financial statements from 4 million to 6 million leva. The measure was proposed by the United Patriots and BSP for Bulgaria. Valeri Simeonov MP of the United Patriots explained that the idea was to ease the administrative burden on smaller companies and enable auditors to focus on the larger ones. RY/VE, LG