This section of issue 2 of Tax News for 2018 presents a summary of the most important changes in the VAT Act (VATA), promulgated in the State Gazette, issue No. 98 dated 27 November 2018 and entering into force as from 1 January 2019 except for certain provisions which have a different entry-into-force date.
VAT treatment of vouchers
The Vouchers Directive (EU) 2016/1065 of 27 June 2016 is implemented by introducing the terms ‘single-purpose voucher’ and ‘multi-purpose voucher’ and establishing the rules for their VAT treatment.
A single-purpose voucher has at the time of its issue a known place of future supply and amount of VAT liability. The VAT will be charged at the time when the voucher is sold and not at the time when the voucher is redeemed for a purchase of respective goods or services. Thus, VAT will be due even if the voucher is not used.
The multi-purpose voucher is a voucher which is not a single-purpose voucher. The VAT will be charged upon the supply of the goods or services for which the voucher is redeemed.
Certain specific instruments and the food vouchers issued under the Corporate Income Tax Act remain outside the scope of the rules for vouchers.
The new rules will apply for vouchers issued after 31 December 2018.
Deferred VAT accrual upon import
As of 1 July 2019, a possibility for applying a deferred accrual of VAT by the importer for the importation of certain types of goods explicitly listed in the law (new appendix No. 3 as per Article 167a of the VATA) is introduced. These include ferrous and non-ferrous metals, ores, organic and non-organic chemical products.
The VAT due for these goods will be accrued by importers in their VAT returns, similarly to the reverse-charge mechanism, and will not be effectively paid to the corresponding customs office.
The right of input VAT deduction for the imported goods will be exercised according to the general VAT rules.
To apply the deferred VAT accrual: (i) the importer must be registered for VAT under the general rules (i.e. not under specific registration headings) for more than six months prior to performing the import, (ii) must have no unsettled public liabilities and (iii) the customs value of each item, declared for import, must be equal or higher than BGN 50,000.
Collateral for the supply of liquid fuels
The minimum collateral amount of BGN 50,000 for supplies of liquid fuels is abolished.
For collaterals already provided, where there are grounds for their reduction, the taxable person must submit a request to the National Revenue Agency (NRA) for the release of the excess amount up to BGN 50,000.
Local ceiling for electronically supplied services to end customers (B2C supplies)
A maximum ceiling of EUR 10,000 is introduced for electronically supplied services to end customers (B2C supplies) performed in other Member States, under which the supplies are subject to the VAT rules of the Member State of establishment of the supplier.
The ceiling of EUR 10,000 is calculated as the total amount of the B2C supplies performed in Member States, other than the state where the supplier is established, and is not to be exceeded during the current as well as the previous year.
In order to apply the regime, the supplier must be established in one Member State only.
The ceiling is not mandatory and the supplier may opt to apply the general rules for the taxation of B2C supplies of electronic services by charging VAT under the MOSS regime.
Electronic fiscal receipts for online sales
Online stores will be able to issue electronic fiscal receipts for their online sales which will be sent to an e-mail of the customer. This will be possible for online stores registered in the electronic public register of online stores newly created by the NRA. The procedure for registration and deregistration from this register will be further determined in Ordinance № H-18.
A possibility for a person to stay VAT registered during a liquidation procedure until the date of their removal from the Commercial Register is introduced, whereas in this case the liquidator will be jointly liable for the VAT liabilities during the period of liquidation.
Certain changes are introduced for supplies related to international transport and, in particular, for supplies for meeting the direct needs of vessels and aircraft.
The deadline for the application of the reverse charge mechanism for supplies of grains and technical crops is extended until 30 June 2022.
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