BULGARIA’S PARLIAMENT ADOPTED CHANGES TO THE VAT ACT RELATED TO FUEL TRADE

The amendments to the VAT Act provide for a mechanism where traders in liquid fuels will be required to provide a collateral in cash, government securities or unconditional and irrevocable bank guarantee for a period of one year to the competent territorial office of the National Revenue Agency (NRA).

The requirement for the payment of a collateral will become applicable when for the current tax period, a taxable person makes taxable liquid fuel deliveries with a tax rate of 20% and at a total value of 25,000 BGN.

Second, when the total value of the tax bases in intra-community acquisitions of liquid fuels which are not intended for consumption by the person effecting the intra-community acquisitions, exceeds 25, 000 BGN.

Third, when the taxable person receives liquid fuels, released for consumption as referred to in the Law on Excises and Tax Warehouses at a value exceeding 25,000 BGN, if no other reasons for collateral occurred on different grounds.

During the debates on 20th of July, MPs from the Reformist Bloc Martin Dimitrov, Nastimir Ananiev and Peter Slavov objected to some of the changes. They say the changes will lead to the closure of more than 160 companies and restricting of competition.

Rumen Getchev from the opposition "BSP left Bulgaria" said the group would abstain in the vote, because we had to distinguish between the good and bad practices in the sector.