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Streamlining Bulgarian VAT: Fresh Regulations for Bad Debts

Effective as of January 1, 2023, Bulgaria’s Value Added Tax Act (VATA) was overhauled, introducing a comprehensive system for reducing VAT related to outstanding invoices. This framework targets scenarios in which suppliers render it unattainable to collect payments for taxable supplies, offering a mechanism to reduce both taxable base and VAT amounts.

To qualify for a VAT reduction, several specific criteria must be satisfied:

Invoice Issuance: An essential requirement is the issuance of a formal invoice for the supplied goods or services, adhering to the specifications outlined in Article 86 of the VATA.

No Related Parties: The recipient of the supply and the supplier should not be considered related parties at the time of delivery or when the circumstances leading to the classification of the claim as uncollectible occur. This condition prevents undue advantage within connected business entities.

Read more at Eurofast International blog here

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