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Changes in the Excise Duties and Tax Warehouses Act

Changes in the Excise Duties and Tax Warehouses Act

This issue of KPMG's Tax News summarizes the main amendments to the Excise Duties and Tax Warehouses Act (EDTWA) as promulgated in the State Gazette, issue 96 dated 6 December 2019

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Requirements for licensed warehouse keepers and exempt from excise duty final consumers of energy products

The changes to the EDTWA provide for new requirements for licensed warehouse keepers and exempt from excise duty final consumers.

Licensed warehouse keepers

The licensed warehouse keepers storing and producing energy products with codes from 2710 12 to 2710 20 are obliged to install and use video systems for monitoring and control in their tax warehouses for fuels. The systems should ensure the possibility for visual control in real time, continuous recording of the video images on a server and recognition of the license plates of the vehicles entering and exiting the warehouse. The cameras should be placed on all entry and exit points of the facility and to operate without interruption for 24 hours per day. The recordings from the video monitoring should be stored on the respective servers for at least one month while the information needs to be archived and stored in the warehouse for at least two months.

The licensed warehouse keepers are obliged to submit a request to the customs administration for coordinating the implementation of the systems. The submission needs to be done within a three-month term from the entry into force of the forthcoming amendments in the Regulations for the application to the EDTWA (which should be introduced within three months from the changes to the law). The warehouse keepers are obliged to bring their activity into compliance with the new provisions within a three-month term from the issue of the act for coordinating the request.

Exempt from excise duty final consumers

According to the changes, exempt from excise duty final consumers need to use automatic reporting systems allowing for a real-time control of the energy products received and stored in the facility, the utilized raw materials and the produced outputs in accordance with their exemption certificates.

Especially for the facilities receiving and utilizing energy products with codes from 2710 12 to 2710 20 and used for purposes other than motor fuel and heating, the changes provide for: (i) ensuring an online access of the customs administration to the automated reporting systems and (ii) usage of control and measuring devices in the points of control where the energy products enter the facility, are utilized in the production process or are taken out of the facility.

The exempt final consumers should bring their activity into compliance with the new provisions within a three-month term from the amendments to the ordinances as per Art. 103a, paragraphs 2 and 4 of the EDTWA. For this purpose, the consumers need to submit notifications to the director of the territorial customs directorate where the facility is located.

Application of Ordinance No 13a-10403 for the purposes of the excise legislation

The amendments provide for the application of the exception from excise duty liability for natural losses of goods included within the scope of Ordinance No 13a-10403 for the maximum limits of natural losses, waste and shortages of goods during their storage and transportation. The exception relates to losses which have occurred prior to the release of the excise products for consumption and provided that these losses are duly reported in the excise registers of the entity.

Prior to the changes, the exception for natural losses was formally applicable only to goods falling within the scope of Ordinance No 4 from 28.06.2006 for the maximum limits of the natural losses of excise goods.

Other legislative amendments

The other amendments, inter alia, include:

  • Provision that the excise duty should be fully collateralized for goods placed under customs procedure in accordance with the provisions of the customs legislation for securing customs duties (prior to the amendment the provision did not include explicit reference to the customs legislation)
  • Clarification of the rule for payment of excise duty in cases when the deadline for submission of excise returns is extended, namely, that in such situations the excise should be paid within the initial term of the return, i.e. before its extension
  • Obligations for drivers of vehicles transporting goods to exempt from excise duty final consumers or under excise duty suspension regime whereby the drivers are obliged to deliver the goods only to the specific place listed in the excise documentation and, in case of reloading, to submit notification to the respective territorial customs administration
  • Provisions regarding the transportation and sales of cigarettes from duty-free trading facilities
  • Specification that the preliminary application of customs decisions regarding termination of certain excise registrations and certificates is effective from the date when these are issued 
  • Regulation for the application of the procedure for movements of goods released for consumption on the territory of another EU Member State and dispatched to Bulgaria in the situations under the new provisions of the Value Added Tax Act for goods delivered to the Bulgarian continental shelf and the exclusive economic zone 
  • Clarification that the procedure for refund of excise duty on goods delivered to the North Atlantic Treaty Organization will be in accordance with the rules in the Regulations for the applications of the EDTWA (prior to the amendment the refund was effected in accordance with the regulatory provision from an interdepartmental ordinance)
  • Introduction of new obligations for postal operators in terms of control over parcels with excise goods as well as prohibition for individuals to send/receive such goods unless the explicit exceptions apply 
  • Rules aiming to prevent the transfer of ownership over goods for which there is information for breach of the excise rules as well as rules for seizure and storage of goods by the customs administration.

© 2020 KPMG Bulgaria EOOD, a Bulgarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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