11.02.2016

Bulgaria will request an exemption from the VAT rules in regard to land vehicles and the NRA's guidelines on the application of the so-called "weekend" tax will be complemented with further clarifications - this was made clear at the meeting held today at the Ministry of Finance. The meeting was attended by the Chairperson of the parliamentary Committee on Budget, Menda Stoyanova, the Minister of Finance, Vladislav Goranov, the Executive Director of NRA, Boyko Atanasov, the Executive Director of the Confederation of Employers and Industrialists in Bulgaria, Evgenii Ivanov, and experts.

The request for derogation to the European Commission will propose to limit the entitlement to deduct the input tax to 50% for land vehicles, by analogy with the exemptions agreed by the United Kingdom, Estonia, Latvia, Poland and Romania. This will relieve the accounting and the tax planning in the cases where these are used for private purposes. Additional consultations will be held in the coming weeks to determine the precise scope of the requested derogation. The participants in the meeting commented the expectations of the businesses and the NRA as regards VAT declaration and shared the view that VAT is due in all cases where company assets are used for private purposes but the accounting mechanisms could be relieved and facilitated.

The participants also agreed to settle, by means of future changes in the tax legislation, the issue of company expenses' taxation in the cases where company property is provided to employees for private use. They shared the view that the above could happen through taxation of company expenses and not of personal income, which would meet the fiscal expectations of the state and at the same time would not present an additional difficulty for businesses. 

It was again clarified that the deduction of the input tax for the acquired goods could be postponed for a period of up to 12 months during which companies could define more precisely the proportion of company/private use of their assets, not charging VAT for the private use.

The NRA undertook the commitment to introduce internal rules to ensure impartially while making checks and audits in the context of exercising control over the private use of company property.