Bulgaria Introduces Amendments to the VAT Act

December 29, 2022

The National Assembly of Bulgaria has adopted the Bill to Amend the VAT Law. The amended provisions of the Law extend the applicability of the reduced VAT rate of 9% on different types of goods and services, and the VAT rate of 0% on bread and flour. This means that taxpayers will continue to apply these rates for their respective supplies until the end of 2023. 

Timeline and Impact

The temporary extension of the VAT rate of 9% and zero VAT was supposed to apply until December 31, 2022 and July 1, 2023, respectively. After the amendment, both of these rates will be applicable until December 31, 2023, except for the ones where Parliament has decided to make a reduced VAT rate of 9% permanent.

The reduced VAT rate of 9% will apply to: 

  • Tourism, catering and restaurant services
  • Sports facilities and gyms

The temporarily reduced VAT rate of 9% becomes permanent for: 

  • delivery of physical books or e-books, or both (including textbooks, educational books and educational kits, children's books with illustrations, for drawing or coloring, printed or handwritten music editions)
  • periodical printed works (newspapers and magazines) on physical media or carried out electronically, or both, other than publications which are wholly or mainly intended for advertising and other than publications which consist wholly or mainly of video content or audio-musical content
  • supplies of food suitable for babies or small children, baby diapers and similar baby hygiene products

The VAT rate of 9% was already permanent for: 

  • delivery of accommodation services provided in hotels and similar establishments, including the provision of holiday accommodation and renting out places for camping sites or caravans, with a place of performance on the territory of the country;

The zero VAT rate will be levied for: 

  • Bread and flour 

How can Fonoa help?

Instantly determine the tax treatment of your transactions globally using Fonoa’s flexible and customizable tax engine. Our easy-to-integrate solution automatically keeps track of changing rates and rules to help your business stay compliant. 

Get in touch today!

Aleksandar Delić
Tax Researcher

Aleksandar is a Tax Research Analyst at Fonoa, and previously worked as a Business Analyst in New Black BV’s Compliance department. Based in Novi Sad in the Republic of Serbia, Aleksander joined Fonoa for the opportunity to work with a team of highly skilled TaxTech experts and make a real impact on the industry. Fun fact: If he could open any kind of business, it would be a pizzeria that serves delicious pies using only the freshest ingredients imported directly from Italy. Mangia!