On 27th of March 2025, the State Budget Act of the Republic of Bulgaria for 2025 was promulgated in the State Gazette. Several tax laws have been amended, through the law’s Transitional and Final Provisions, including the Value Added Tax Act (VATA).
Some of the key amendments to the VATA are as follows:
1. The threshold for obligatory VAT registration has been amended again — from BGN 166,000 to BGN 100,000. The BGN 166,000 threshold remained in force only from 1st of January 2025 to 31st of March 2025.
The new threshold of BGN 100,000 is effective as from 1st of April 2025 and will remain in force until the introduction of the euro in Bulgaria.
The calculation of the VAT liabilities has also been changed for individuals/entities who/which were required to register but failed to file a registration application on time — such individuals/entities are now liable for VAT on taxable supplies exceeding the threshold of BGN 100,000, starting from the date on which the threshold was exceeded, until the date of actual registration or the elimination of the grounds for registration.
These amendments are not aligned with the changes under Directive 2006/112/EC.
2. The issuance of invoices for fuel supplies has been amended.
It is now stipulated that an invoice for fuel supplies recorded through an electronic fiscal memory system (EFMS) and paid in cash or cash-equivalent payment instruments must be issued exclusively through the EFMS in the form of an extended fiscal receipt. The issuance shall be done at the time of the transaction.
In such cases, the general rule of issuing an invoice within 5 days from the taxable event does not apply, nor do the provisions for summary invoices for multiple supplies during the same tax period.
3. Amendments regarding adjustments to waste collection and disposal services supplied to VAT-registered municipalities have been made.
These amendments aim to address uncertainties and issues in the application of Art. 163a, para. 4 of the VATA, effective since 1st January 2023, which provides that the reverse charge mechanism (i.e., VAT self-assessment by the recipient) does not apply to municipalities for activities on waste collection and disposal services.
Adjustments to invoiced supplies for such services are considered lawfully carried out if, within the term under Art. 109 of the TSSPC, the supplier has cancelled the issued invoices, issued new ones pursuant to Art. 116 of the VATA, and the municipality, as the recipient, has cancelled the corresponding self-assessed protocols under Art. 117a of the VATA. In these cases, it is assumed that the VAT was not included in the agreed price.
Where such correction has not been made, any VAT paid into the state budget by municipalities as recipients of the above services is deemed to have been paid by the supplier and is not subject to refund to the municipalities.
Disputes between municipalities and suppliers arising from discrepancies in the invoiced amounts are to be resolved under the general provisions.
The above rules also apply to ongoing administrative and court proceedings.The present article is for information purposes only. It is not a (binding) legal advice. For a thorough understanding of the subjects covered and prior acting on any issue discussed we kindly recommend Readers consult Ilieva, Voutcheva & Co. Law Firm attorneys at law.
