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Bulgaria to Reduce VAT to 18 percent after 2007
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Bulgaria will reduce the Value Added Tax (VAT) rate from the current 20% to 18% from 2007 under the new VAT bill, which the government has proposed to be enforced from January 1, 2006.
The bill is part of ongoing effort to align the local legislation to the EU body of law and to ensure the successful launch of the National Revenue Agency.
VAT revenues added up to BGN 3.8 B in 2004 and are budgeted at BGN 4.1 B for 2005.
Under the new bill, any small businesses - defined as entities with an annual turnover below BGN 50,000, may register for the purposes of the VAT Act. The new bill shortens the VAT refund period from 45 to 30 days.
The new bill keeps intact the preferential treatment that priority investment projects already enjoy. Eligible projects should have an implementation period of up to 2 years, investment should total BGN 10 M with at least 50 new jobs created in the process.
Eligible investors should have no outstanding financial obligations and should prove they have the necessary financing. If all the conditions are met, the investors are eligible to be refunded VAT incurred by the purchase of the investment goods. |
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