07.06.22

VAT rate changes to combat rising inflation

Bulgaria has been deploying a range of fiscal measures to combat spiralling inflation in the country. In the past few months, Bulgaria has extended reduced rates and applied zero-rate VAT on certain products to reduce the burden on taxpayers.

The Bulgarian government has acknowledged the effect of rising inflation on taxpayers and has responded accordingly with an anti-crisis fiscal package.

Significant fiscal measures within the package include:

• VAT on bread reduced to 0%;
• VAT on heating, hot water and natural gas for household consumers to 9%;
• An increase in the VAT threshold registration – from BGN 50,000 to BGN 100,000.

The Bulgarian government has now accepted a bill to increase the VAT registration threshold in the country. Currently, the VAT registration threshold is set at BGN 50,000 (or 25,500 Euros).

The proposed VAT registration threshold would increase in line with the following:

• 1^st January 2023: BGN 100,000 (c. 51,300 Euros)
• 1^st January 2024: BGN 166,000 (c. 85,000 Euros)