“WEEKEND TAX” TO BE INTRODUCED FROM 2016 FOR COMPANIES IN BULGARIA

On 8th of October, Bulgaria’s cabinet approved tax changes to the draft Law on amending and supplementing the Law on Corporate Income Taxation. The changes envisage introduction of the so called “weekend tax “, which is proposed to come into force from 2016.

According to the changes, VAT will be recovered partially to companies if they use cars and property worth more than 5,000 BGN not only for business needs, but for personal purposes as well.

Companies will be required to prove to Bulgaria’s National Revenue Agency (NRA) to what extent the cars and immovable property they own, at a value over 5,000 BGN, are used for the purposes of business and to what extent for personal needs. To prove that, companies will submit electronic declarations to NRA. The methods of assessment will be developed by the Minister of Finance.

The measure will apply only to companies which are registered under the VAT law and claim VAT tax refund. It aims to tackle tax frauds. According to Bulgaria’s Minister of Finance, Vladislav Goranov, tax frauds cause damages to the state budget worth scores of millions BGN per year.