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Bulgaria: Bulgaria introduces VAT rules on food donations

15 December 2016

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Petar Varbanov

The new Bulgarian VAT system applicable to free food donations was published in the Official Gazette on November 8 2016 and will apply from January 1 2017. It will result in the VAT-free supply of food donations to food banks, under certain conditions.

Food banking and related activities in Bulgaria include donations of food from manufacturers and retailers as well as storage, preservation and/or cutting and packaging of donated food.

The list of foods subject to food banking is approved by the Minister of Agriculture and Food, after consultation with the Minister of Finance. The list will be published on the websites of the Ministry of Agriculture and Food and the Bulgarian Agency for Food Safety. Only items found on the list may be subject to the newly introduced VAT exemption. The provision of donated food to persons for free must be done in compliance with the food safety legislation.

Permission to operate as a food bank may be issued to a legal non-profit entity established for public benefit if it meets the following requirements:

  • Has zero public liabilities (including tax, social security or other public liabilities);
  • Has no previous penalties for violations under the VAT Act in the past two years;
  • Owns or rents space/facilities for carrying out activities in food banking;
  • Owns or leases vehicles for transportation purposes;
  • Has its own network, or a network of organisations, providing free food; and
  • Uses the special reporting system that allows the authorities of the Bulgarian Agency for Food Safety and the National Revenue Agency to control the donated, stored and provided food.

Food donations will be VAT exempt only when a set of conditions is fulfilled. Such conditions include:

  • The value of one unit of the food item should be considered to be of insignificant value;
  • The operator of the food bank should be registered as per the requirements;
  • The goods are included in the special list mentioned above;
  • The food is considered to be edible; and
  • The food is marked with the text "donation is not subject to sale" and the total amount of donated food to operators of food banks for the current calendar year does not exceed 0.5% of the total value of the donating entity's annual turnover for a calendar year preceding the current one.

It is worth noting that, as per the new Law, the entity donating the food is obliged to issue a protocol within five days of the donation, which must be included in the VAT return for the period.

Petar Varbanov (
Eurofast Bulgaria Office
Tel: +359 2 988 69 75

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