International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Bulgaria: New rules for cash reporting in Bulgaria

pechilkova.jpg

Donka Pechilkova

On January 1 2014, Bulgaria took one more step forward to the synchronisation of the local Bulgarian legislation with the European one by passing changes in the Law on Value Added Tax by applying a special regime of cash reporting for Bulgarian entities. This kind of reporting is well known in more than twenty EU member states and they have proved their good results. The main principle underlying this regime is the VAT to be payable in the tax period when the company received payment, fully or partially, from its client but not when the related invoice is issued. Respectively companies, registered under this regime will accrue and deduct VAT of the preceding deals after payment to the supplier is executed. Once payment is executed a protocol for payment should be issued and based on this protocol the relevant amount will be included into the VAT statement for the related tax period. It is important to note the regime is applicable only for deals that have place of performance in the territory of Bulgaria, and is not applicable for import of goods, inter-community sales and deliveries; zero rated deals; deals between related parties and sales to non-registered under VAT regime entities. The regime does not have a mandatory character and Bulgarian companies can choose to register voluntary under this regime.

In accordance with the Bulgarian legislation, there are some restrictions on applying of the 'cash reporting' regime. It could be applicable for entities that are VAT registered; have turnover not more than €500,000 ($685,000) for the last 12 months; the entity is not classified as risky from the National Revenue Agency structures; the entity has not been appointed for cases of abuses and has no claims for collection of public liabilities. All the payments from and to companies, registered under the cash reporting regime should be bank transfers or post transfers via license post operators.

The changes aim to help to the Bulgarian business by improving the liquidity of the companies, especially to the small and medium business level. Last but not least is the attempt of the politics by these changes to avoid the possibility of tax frauds, which is showing their will to secure much better future business environment.

Donka Pechilkova (donka.pechilkova@eurofast.eu)

Eurofast Global, Sofia Office

Tel: +359 2 988 69 78

Website: www.eurofast.eu

more across site & bottom lb ros

More from across our site

ITR’s latest quarterly PDF is going live today, leading on the EU’s BEFIT initiative and wider tax reforms in the bloc.
COVID-19 and an overworked HMRC may have created the ‘perfect storm’ for reduced prosecutions, according to tax professionals.
Participants in the consultation on the UN secretary-general’s report into international tax cooperation are divided – some believe UN-led structures are the way forward, while others want to improve existing ones. Ralph Cunningham reports.
The German government unveils plans to implement pillar two, while EY is reportedly still divided over ‘Project Everest’.
With the M&A market booming, ITR has partnered with correspondents from firms around the globe to provide a guide to the deal structures being employed and tax authorities' responses.
Xing Hu, partner at Hui Ye Law Firm in Shanghai, looks at the implications of the US Uyghur Forced Labor Protection Act for TP comparability analysis of China.
Karl Berlin talks to Josh White about meeting the Fair Tax standard, the changing burden of country-by-country reporting, and how windfall taxes may hit renewable energy.
Sandy Markwick, head of the Tax Director Network (TDN) at Winmark, looks at the challenges of global mobility for tax management.
Taxpayers should look beyond the headline criteria of the simplification regime to ensure that their arrangements meet the arm’s-length standard, say Alejandro Ces and Mark Seddon of the EY New Zealand transfer pricing team.
In a recent webinar hosted by law firms Greenberg Traurig and Clayton Utz, officials at the IRS and ATO outlined their visions for 2023.