Bulgaria Introduces Amendments to the VAT Act

Bulgaria Introduces Amendments to the VAT Act

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

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