Bulgarian VAT Law Amendments

Bulgaria/October 2014

The Bulgarian Parliament is discussing and amending several important tax laws including the VAT Law as well as the CITA and Tax and Social Security Proceeding Code; all of which will lead to important changes in the Bulgarian tax system. The most significant changes concern the VAT Law and are specifically related to amendments in the EU-specialized legislation, the Council Implementing Regulation (EU) No 1042/2013, amending Implementing Regulation (EU) No 282/2011 regarding to the place of supply of services  (the new ‘European VAT Package’).

Effective from 1 January 2015, all entities that provide telecommunication, TV and radio services to end consumers will be subject to VAT taxation in the jurisdiction where their end user is located. As this could cause massive inconveniences for such companies, by introducing the obligation of VAT registration in every country they have end users in, there is an option for applying of a special VAT regime treatment for such cases. For that purpose, the providers should submit a special application for declaring of data via the information system MOSS (Mini-One-Stop-Shop). The submission of the application, as well as the submission of the following quarterly mandatory reports will be done electronically, via the web-site of the National Revenue Agency for companies registered in Bulgaria. Companies registered in Bulgaria can submit their applications starting from 1 October 2014 with the the registration being effective as of 1 January 2015.

The country where the provider is registered is known as the ‘ID member-state’ and will be the ‘one-stop shop’ from where all the ensuing rights and obligations of that registration should be followed and controlled. Effectively this means that the submission of the special VAT statements for services provided in EU, along with the payment of the due VAT arising from such supply, will be done in Bulgaria. Practically, a provider, registered for applying of MOSS regime will submit special VAT statement (an appendix of the standard one) each quarter, containing a description of the provided telecommunication, radio and TV services, along with the payable VAT amount.

The MOSS registration can be initiated by suppliers located in the EU, as well as a company outside of the EU. The MOSS regime is not an obligatory one and if a provider of the mentioned services is not registered via the system MOSS, the entity is obliged to be VAT registered in every member-state where it has end-consumers.

All of the above mentioned amendments are aimed at harmonizing the local legislation with EU.

Donka Pechilkova (donka.pechilkova@eurofast.eu)
Eurofast Global, Sofia Office
Tel: +359 2 988 69 78