Bulgaria: Miscellaneous

Amendments to the VAT Act were published in the State Gazette which will enter into force on 1 January 2014. Some of the important changes are:
The amendments to the VAT Act implement the option granted by the European legislation to apply a cash accounting scheme. In accordance with the new provisions of the VAT Act, eligible taxable persons will have the opportunity to delay payment of output tax to the state budget until they have received payment from their customers. To apply the cash accounting scheme, the taxable persons should obtain a formal permission from the revenue authorities.

Taxpayers with an annual taxable turnover up to EUR 500,000 can apply for this regime. The cash accounting scheme is not applicable for certain types of transactions such as import, export, intra-Community acquisitions and supplies and other supplies explicitly listed in the VAT Act.

The right to VAT credit of companies receiving invoices from persons applying the cash accounting scheme will arise when they have paid for the goods/services received. Thus, there may be a mismatch between the month in which the invoice is received and the month when the input VAT on the invoice may be claimed for deduction, which is when the invoice is paid. In addition, in order to deduct input VAT on such invoices, the recipient should have, apart from the invoice, also a payment document and a special protocol issued by the supplier.

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