- Bulgaria’s Value Added Tax Act (VATA) has been overhauled to introduce a system for reducing VAT related to outstanding invoices.
- Specific criteria must be met to qualify for a VAT reduction, including the issuance of a formal invoice and no relationship between the recipient and supplier.
- The receivable should not have been transferred to another party for consideration, and the supplier must demonstrate efforts to collect the receivables.
- If the recipient was a registered VAT person, the supplier must send a written notification indicating the claim is uncollectible.
- Several prerequisites categorize a claim as uncollectible, including time limits, court decisions, legal repayment, enforcement proceedings, debtor’s bankruptcy, and the 365-day rule.
- After bankruptcy or liquidation proceedings, if the debtor is removed and the claim remains partially unsatisfied, the debt is considered irrevocably uncollectible.
- These changes aim to simplify VAT compliance and accommodate the evolving business landscape in Bulgaria.
Source: eurofast.eu
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
