Changes to several tax laws for 2025 published for public consultation

VAT registration threshold rises. It is proposed that registration under the VAT Act will become compulsory upon reaching a taxable turnover of BGN 166 000 or more instead of the current BGN 100 000. This is one of the changes in the tax laws published for public discussion by the Ministry of Finance.

The ministry has published draft amendments to several key tax laws for public discussion. The proposed amendments include important changes affecting corporate income tax, personal income tax, value-added tax, and excise duties.

CORPORATE INCOME TAX ACT

1. The tax relief through corporate tax assignment for production activities in municipalities with unemployment higher than the national average will continue. The relief will apply until 31 December 2030.
2. Clarifications are introduced for multinational and large national groups about the surtax, which are in line with the OECD guidelines for the implementation of global minimum taxation.
3. Provisions relating to the issue of paper food vouchers are abolished.

PERSONAL INCOME TAX ACT

1. The proposed changes clarify the provisions on the use of tax benefits for children and disabled children by parents without parental rights.
2. Amendments are made to the tax payment provisions to better align with current NRA rules.
3. Administrative penalties are introduced for failure to file information on time.

VALUE ADDED TAX ACT

1. Special regimes are introduced for small businesses, in line with EU requirements, which allow exemption from the obligation to charge VAT up to a certain threshold.
2. Changes to the tax accounting of assets and inventories are coming in 2025. VAT-registered companies will have to submit quarterly information on their fixed assets and inventories to the tax authorities. The proposal aims a better control of the tax credit as well as the existence of transactions that allow tax evasion.
3. A change to the criteria for determining the place of supply of services provided electronically will be intoduced. The taxation of this type of service will be based on the location of the consumer. The aim is to ensure that the tax due is levied in the Member State where consumption takes place.

EXCISE DUTIES AND TAX WAREHOUSES ACT

1. New control measures to prevent offenses by persons and companies at risk.
2. The provisions on e-cigarette liquids have been refined. The aim is to remove the difficulties that have arisen and the possibility of divergent interpretations concerning the application of the VAT Act.
3. Provisions are introduced to limit the restocking of tobacco products when new excise duty rates are introduced.

No change in basic tax rates is envisaged.

These amendments are aimed at bringing Bulgarian tax legislation in line with European and international standards, facilitating business, and reducing the administrative burden.