24.11.2022

THE EU ALLOWED BULGARIA TO INCREASE THE VAT THRESHOLD TO BGN 100,000

The Council of the European Union allowed Bulgaria to introduce a special measure for derogation from Article 287 of Directive 2006/112/EC on the general system of value added tax (VAT), the Ministry of Finance reports.

In this way, our country is allowed to exempt from VAT taxable persons with an annual turnover up to the equivalent in national currency of 51,130 euros at the exchange rate on the day of accession.

The period of validity of the derogation is until 31 December 2024, by which time Member States have to transpose Directive (EU) 2020/285, and accordingly from 1 January 2025 Member States will be allowed to exempt supplies of goods and services from VAT, carried out by taxable persons whose annual turnover does not exceed the threshold of 85,000 euros.

The increase of the minimum threshold for VAT registration from BGN 50,000 to BGN 100,000 is a measure that will have a positive effect in the current difficult economic situation and will lead to a reduction of the administrative burden for businesses, especially for small enterprises.

Persons with a taxable turnover of less than BGN 100,000 may remain voluntarily registered for VAT.

The request for derogation from Art. 287 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax was sent to the European Commission through the Permanent Representation of the Republic of Bulgaria to the European Union on 13 May 2022 and its receipt was confirmed by Commission on 23 May 2022.