Bulgarien

Local currency change to Euro Tungsten successfully accommodated Croatia’s local currency change from Croatian Kuna to the Euro, effective 1 January 2023. Bulgaria is similarly preparing to transition its local currency, the Bulgarian Lev, to the Euro currency. It has targeted an implementation date of 1 January 2024. As with our Croatia local currency change implementation, this transition will involve modifications to our all invoice types in Bulgaria, including debit and credit notes. Tungsten is closely monitoring the proposed local currency change in Bulgaria and will accommodate the local currency change, if confirmed. We will keep our Bulgarian market informed with any developments regarding the change.  

Revised tax VAT rates Bulgaria continues its busy fiscal trajectory alongside lowering its VAT registration threshold this month, through the adopting of the Bill to amend the VAT law. This has introduced multiple VAT rate changes in the country for key services.  Bulgaria initially implemented several VAT changes in the summer of 2020 as a direct response to the Covid pandemic, where the standard tax rate of 20% was replaced by the reduced rate of 9% for various goods and services. The 9% reduced rate will now also apply to the following: 

• Catering and restaurant services 
• Tourism services 

• Books and textbooks 
• Certain foodstuffs and supplies 
• Sports facilities and supplies 

These tax measures are expected to last until December 2023.  Bulgaria is a compliant territory for Tungsten Network and we support all valid VAT rates in the country as part of our e-invoicing solution.  

VAT registration threshold increase We wanted to remind you that the VAT registration threshold in Bulgaria is increasing from BGN 50,000 to BGN 100,000 as of 1 January 2023.  Please refer to our recent post on the VAT threshold increase here.  

Potential e-invoicing mandate The adoption of e-invoicing across Europe is gaining some momentum. There are indications that Bulgaria has been influenced by countries in close proximity and intends to introduce an e-invoicing mandate for B2B transactions. Authorities in Bulgaria are holding public consultations, and e-invoicing is being considered amongst other digital VAT-related incentives. At the moment, the proposal to introduce e-invoicing has not yet been crafted into law. However, this does demonstrate the inclination of countries to digitalise their tax-related processes for a more automated and efficient framework of their fiscal operations. Tungsten Network is compliant in Bulgaria, and we will closely monitor growing e-invoicing impetus in the country.

VAT rate changes to combat rising inflation Bulgaria has been deploying a range of fiscal measures to combat spiralling inflation in the country. In the past few months, Bulgaria has extended reduced rates and applied zero-rate VAT on certain products to reduce the burden on taxpayers. The Bulgarian government has acknowledged the effect of rising inflation on taxpayers and has responded accordingly with an anti-crisis fiscal package. Significant fiscal measures within the package include:

• VAT on bread reduced to 0%;
• VAT on heating, hot water and natural gas for household consumers to 9%;
• An increase in the VAT threshold registration - from BGN 50,000 to BGN 100,000.

The Bulgarian government has now accepted a bill to increase the VAT registration threshold in the country. Currently, the VAT registration threshold is set at BGN 50,000 (or 25,500 Euros). The proposed VAT registration threshold would increase in line with the following:

• 1^st January 2023: BGN 100,000 (c. 51,300 Euros)
• 1^st January 2024: BGN 166,000 (c. 85,000 Euros)

Zero-rate VAT applied to certain products In line with spiralling living costs across Europe, Bulgaria is introducing further tax measures intended to reduce the burden on taxpayers. To this effect, it has put forward a draft Bill Amending and Supplementing the Value Added Tax Act. It has proposed a VAT reduction on the following items: • Basic foodstuffs; • Non-alcoholic drinks; • Medical products; • Heating, electricity and gas. This measure will now be debated in Parliament. It is expected that this measure could come into place as soon as 1st April 2022 if approved.

Extension of 9% reduced rate for certain products

In 2020, we informed you of the 9% reduced rate that was applied to certain products in Bulgaria:
• Books on a physical carrier or by electronic means;
• Restaurant and catering services, including the supply of food for consumption at home;
• Food suitable for babies and young children;
• Baby diapers and similar baby hygienic items;
• General touristic service, as well as excursions organised by tour operators and tour agents;
• Services for the use of sports facilities.
This reduced rate will now be extended and apply to these products until 31 December 2022.

Concept of real-time reporting

The Bulgarian National Revenue Agency (NRA) are looking to progress the preparation of a concept for receiving real-time information on invoices this year. The manufacturers of cash registers will become software fiscalizers, because the microcomputers that are in them can send this data to the NRA.

Vorübergehende Einführung eines Mehrwertsteuersatzes von 0 % auf Impfungen

Vom 01. Januar 2021 bis 31. Dezember 2022 gilt für Impfstoffe ein Mehrwertsteuersatz von 0 %.