An amendment to the Value Added Tax Act (VATA) was published in the Bulgarian State Gazette on 8 March 2013.  The amendment introduces changes to the VATA, the Income of Natural Persons Act (INPA) and the Corporate Income Tax Act (CITA).

The amendment introduces the obligation on any person, whether or not they are registered by virtue of the VATA, to issue cash receipts from an integrated automatic system for the management of commercial activities if rendering sales or supplies in a commercial outlet.  It is still possible to issue cash receipts from a fiscal device as stated under the previous regime.

The definition of an integrated automatic system is a system providing automatic control over the movement of goods and performance of services until their final supply. 

Other requirements include:

  • A cash receipt should be a document certifying the sale or supply of goods or services;
  • The issuing integrated automatic system/fiscal device should have a remote connection with the National Revenue Agency;
  • If a commercial outlet sells fuel, the connection with the National Revenue Agency should be capable of giving information as to the current amount of fuel held in the tanks at the premises; and
  • The integrated automatic system/fiscal device should be serviced by firms registered with the Bulgarian Institute of Metrology.

Under certain conditions, petrol stations may not be required to issue cash receipts.  In addition, certain suppliers/recipients may not be required to provide information on the current amount of fuel held or the goods/services provided.

The sanctions for non-compliance with the above rules remain the same:

  • Natural persons (who are not traders) – fines of BGN 100 to 500 (EUR 50 to 250);
  • Corporations and sole traders – fines of BGN 500 to 2000 (EUR 250 to 1000);
  • Fines are doubled for repeated infringement; and
  • A person receiving a cash receipt will be fined BGN 5 (EUR 2.5) for not retaining the receipt until after leaving the outlet.

Administrative measures may be taken to prevent continued violation.  The new legislation allows income authorities, on top of any sanctions that may be imposed on the infringing commercial outlet, to suspend trading activities for up to one month.

The amendment also introduces the same obligation for the issue of cash receipts in the INPA and the CITA unless payments are either made through a bank transfer or offset.

A cash receipt must be issued, if mandatory under the CITA, for expenses to be recognized for corporate tax purposes.

The CITA also introduces a requirement for the existence of both an invoice (or other primary accounting document) and a relevant boarding card to recognize expenses for international air transport.

Finally, the amendments in the CITA specify that a cash receipt shall be sufficient to prove expenses taxed with the one-off tax. Expenses for use of vehicles for management purposes taxed with one-off tax shall be recognized for tax purposes even without a travel log.

Law: Value Added Tax Act; Income of Natural Persons Act; Corporate Income Tax Act.