The Council of Ministers has submitted a proposal on 17^th October 2016 to the National Assembly to amend various tax acts. The amendments are about cash payment changes, excise duty changes, local tax changes and changes to the accountant act that are summarized below:

Limitation of Cash Payments Act

The proposed threshold for cash payments made in Bulgaria from BGN 10,000 to BGN 5,000.

Amendment in Excise Duties and Tax Warehouses Act

(a) New rules for foreign traders

Entities who were registered as traders in the European Economic Area (EEA) will have the right for applying a certificate for an end-user exemption from excise duties if they have a registered branch in Bulgaria. Besides, EEA entities registered under the Bulgarian Excise Duties and Tax Warehouses Act as specialized small distilleries and or small wine producers must do such activities via a branch established in Bulgaria. This rule applies to entities which are obliged to register on the basis of Excise Duties and Tax Warehouses Act to conclude transactions involving coals, as well as for the production, import or entry of coals in Bulgaria. EEA-registered entities licensed under the Energy Act of Bulgaria have the possibility of carrying on such activities through a branch or a tax representative under the VAT Act. The tax representative is predicted to have joint and several liability for the liabilities of the foreign person.

(b) Excise duty rates for cigarettes

The current excise duty rates will be from BGN 70 to BGN 101 for per 1,000 cigarettes. Note that, a decrease in the proportional excise duty rate will be from 40% to 27% in case of selling price for 2017 and it will be 28% in 2018.

(c) Excise duties on alcohol used for cleaning in the production of medicines

The amendments in the excise duty on alcohol used for cleaning of facilities for the production of medicines will be subject to a refund, in line with the decision of the Court of Justice for the European Union (ECJ). This is also in line with the judgment of the ECJ in Biovet.

(d) Excise duties for certain activities involving lubricating oils

Presently, excise duties charged on additives for lubricating oils containing petroleum oil or oils obtained from bituminous materials and other chemical products used for purposes other than motor or heating fuel will no longer be refunded.

Administrative simplifications

(a) No tax liabilities exist

A certificate declaring that no tax or social security liabilities exist will no longer be needed if a certificate stating that an end user is discharged from excise duty is issued, or if a license for the operation of a tax warehouse is issued, or in the case of mandatory registration under the Excise Duties and Tax Warehouses Act by persons importing, acquiring or trading in coke, coal, electricity and natural gas and in the case of registration for the consignee or consignor status.

(b) Refusal of excise duty exemption

It is proposed to allow a tacit decision regarding the refusal of the exemption for the end user, given that no written decision has been received by the entity within the terms defined under the Excise Duties and Tax Warehouses Act.

Local taxes

The definition of taxable persons has been clarified, declaring that if the title of ownership and a reduction of immovable property are simultaneously present, all liable persons, i.e. the owner and the concessioner, must pay local taxes in proportion to their respective ownership part of the property. The implementation of the new methodology for calculation of the garbage collection fee (i.e. by applying a base other than the tax value/gross book value or the market price of the real estate) is postponed by 1 year. It will be entered into force from 1^st January 2018.