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27 May 2005
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Accession to EU
Bulgaria and Romania signed the Accession Treaty to the European Union on 25 April and will become members of the EU on 1 January 2007. In the meantime they are required to bring their laws, including indirect tax laws, into line with EU rules and regulations or their entry date may be delayed.
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13 May 2005
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VAT rate decrease planned
Legislation to decrease the standard rate of VAT from 20% to 18% in 2007 has been approved by the Government but has yet to go through the Parliamentary process.
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29 April 2005
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Parliament debates VAT rate reduction
The Bulgarian Government will shortly decide whether to reduce the standard rate of VAT from 20% to 18% with effect from 1 January 2006.
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15 April 2005
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Non-resident businesses - relaxation in rules
With effect from 1 January 2005, non-resident business without an establishment in Bulgaria are no longer required to obtain a Bulgarian VAT registration where they supply services into Bulgaria which are taxed under the reverse charge mechanism.
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26 November 2004
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Zero excise duty for domestic use of propane and butane
On 23 November the Bulgarian Parliament approved a Bill for zero excise duty on gas for household use.
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12 November 2004
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Motion calling for reduction of VAT fails
Bulgaria will not cut VAT from 20% to 18% due to a lack of support in the second reading. The proposals to introduce lower rates for various everyday essential aslo failed.
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22 October 2004
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Proposal to lower VAT approved
A proposal made by the Union of Democratic Forces (UDF) to cut VAT from 20% to 18% by 2006 has been approved. Lower rates of 5% will apply to bread and 7% to dairy products, poultry and medicine. VAT recovery for exporting companies will also be reduced from 45 to 30 days.
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8 October 2004
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Proposal of 7% VAT rate on dairy and meat products
The Bulgarian Chamber of Commerce and Industry (BCCI) has proposed a 7 percent VAT rate on the dairy and meat processing industry, and an obligatory registration of all producers. Business representatives have asked to shorten the deadline for VAT reimbursement from 45 days to 15 days, however, the Government has proposed that the deadline be shortened to 30 days after 1 January 2005.
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10 September 2004
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Traders urge for 7 per cent VAT on medicines
The national chamber of traders and distributors of medicines, sanitary materials and herbs has called for a reduction of the rate of VAT on medicines to 7 per cent. The current VAT rate of 20 per cent on medicines is considered too high.
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18 June 2004
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Call for cut in VAT rate on medicines
The Association of Scientific Researching Pharmaceutical Producers in Bulgaria has called for a cut in VAT on medicines from the current rate of 20% to 10%. The idea has been embraced by the health minister but the finance ministry has so far not commented.
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30 April 2004
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New law gives tax incentives to investors in free trade zones
Bulgaria has passed a bill to create free trade zones within the country which offer tax incentives to investors. Under the new law, companies which invest BGN 1 million in fixed assets or in the development of infrastructure within one of the free trade zones, will not have to pay turnover tax for a period of three years. Those investors who plough more than BGN 3 million into the area will be relieved of turnover tax for five years. The bill was passed by the parliamentary economic committee despite objections from the finance ministry.
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30 April 2004
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Online VAT payments to be introduced by the end of this year
The tax office plans to introduce online payment of VAT for major taxpayers by the end of this year. This is designed to save time and prevent corruption.
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5 March 2004
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Over EUR 1 billion lost due to VAT fraud
Bulgaria has lost over EUR 1.3 billion from VAT fraud over the last 5 years, according to the chief of the State Tax Authority. He also claimed that 10% of Bulgarian VAT- registered companies have been practicing VAT fraud. The finance ministry vowed to set up, in 2004, a fiscal investigation service called 'tax police' to fight against VAT fraud and speed up sanctions against late taxpayers.
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23 January 2004
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Online declarations trial
500 large taxpayers in Bulgaria will be able to submit their VAT declarations online from February. If the trial is successful, all VAT registered businesses will be able to use this service.
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16 May 2003
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Fast track refunds
In a measure to encourage new businesses and jobs in Bulgaria, new rules have been passed allowing VAT refunds from Bulgarian customs within 10 days for certain qualifying companies. In order to qualify for these fast track repayments (which will only apply for two years), the company must be investing in projects costing over €5.1 million and which create more than 50 jobs. In addition, in an attempt to halt the illegal trade in scrap metal, ferrous and non-ferrous metals are to be exempt from VAT.
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18 April 2003
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Scrap metal now VAT exempt
With effect from 7 April 2003, trading in scrap metal is now exempt from VAT in Bulgaria. The exemption extends to processing and recycling and is designed to eliminate VAT fraud in the industry.
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24 January 2003
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Changes in the VAT Act
Changes in the VAT Act mean that software companies will not have to register for VAT in order to qualify for VAT refunds on exports as of 1 January 2003.
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