Promulgated, State Gazette – No. 94/30.11.2010, effective 1.01.2011

PART ONE
GENERAL DISPOSITIONS

Purpose of Act

Article 1. This Act regulates the levy of value added tax (VAT).
Subject to Taxation

Article 2. The following shall be subject to value added tax:
1. each taxable supply of goods or services effected for consideration;
2. each intra-European Union acquisition effected for consideration, whereof the place of transaction is within the territory of the country, by a person registered under this Act or by a person in respect of which an obligation to register has arisen;
3. each intra-European Union acquisition of new means of transport effected for consideration, whereof the place of transaction is within the territory of the country;
4. each intra-European Union acquisition effected for consideration, whereof the place of transaction is within the territory of the country, of excisable goods, where the recipient is a taxable person or a non-taxable legal person which is not registered under this Act;
5. the importation of goods.
Taxable Persons

Article 3. (1) “Taxable person” shall mean any person who independently carries out an economic activity, whatever the purpose and results of that activity.
(2) (Partially declared unconstitutional by the Constitutional Court of the Republic of Bulgaria regarding the expression “as well as the practice of a liberal profession, including as private enforcement agents and notaries” – SG, No. 37/2007, supplemented, SG No. 108/2007) Independently carried out economic activities shall comprise the activities of producers, traders and persons supplying services, including mining and agriculture, as well as the practice of a liberal profession, including as private enforcement agents and notaries. Any remunerative activity, carried out on a continuing basis or as a regular occupation or business on a professional basis for the purpose of obtaining income therefrom, including the exploitation of tangible and intangible property, shall also be considered an independently carried out economic activity.
(3) The following shall not be considered an independently carried out economic activity:
1. the activity carried out by natural persons under an employment relationship or under a legal relationship equivalent to an employment relationship;
2. (amended, SG. No. 108/2006) the activity of natural persons, who are not sole traders, in respect of the activity carried out by such natural persons and regulated by law, concerning management and control of legal persons.
(4) Any person, who from time to time effects an intra-European Union supply for consideration of a new means of transport, shall also be regarded as a taxable person.
(5) The State, the state and the local bodies shall not be taxable persons in respect of all activities and supplies in which they engage in their capacity as a central or local government authority, even where they collect fees, contributions or payments in connection with these activities or supplies, with the exception of:
1. the following activities or supplies:
(a) (amended, SG No. 41/2007) electronic communications services;
(b) supply of water, gas, electricity or steam;
(c) transport of goods:
(d) port and airport services;
(e) passenger transport;
(f) sale of new goods manufactured for sale;
(g) supplies effected for the purpose of intervention on the market in agricultural products;
(h) organizing or running of trade fairs, exhibitions;
(i) warehousing;
(j) the activities of commercial publicity bodies, advertising services, including rental of advertising space;
(k) tourist services;
(l) (supplemented, SG No. 94/2010, effective 1.01.2011) running of shops, industrial canteens and other commercial outlets, the letting of buildings, parts of buildings and sales areas, as well as granting of concession for construction, service or extraction/mining;
(m) activities of radio and television bodies of a commercial nature.
2. Any supplies other than those covered under Item 1, which will lead to significant distortion of competition.
(6) (New, SG No. 95/2009, effective 1.01.2010) Any taxable person carrying out also exempted supplies and/or supplies or activities beyond the framework of the economic activity conducted independently, as well as any non-taxable legal person registered for the purposes of the value added tax shall be considered to be a taxable person for all services provided to such persons.
Non-taxable Legal Person

Article 4. (Amended, SG No. 95/2009, effective 1.01.2010) “Non-taxable legal person” shall mean any legal person which is not a taxable person within the meaning given by Article 3, paragraphs 1 to 5 herein and which effects intra-European Union acquisition of goods.
Goods

Article 5. (1) “Goods,” within the meaning given by this Act, shall be any movable and immovable thing, including electric current, gas, water, heat or refrigeration and other such, as well as standard software.
(2) Money in circulation and foreign currency used as tender shall not be goods within the meaning given by this Act.
Supply of Goods

Article 6. (1) “Supply of goods,” within the meaning given by this Act, shall be the transfer of the right of ownership or another right in rem to goods.
(2) For the purposes of this Act, the following shall also be considered supply of goods:
1. the transfer, resulting from a request or an act of a central or local government authority or the administrations thereof or in pursuance of the law, of a right of ownership or another right in rem against payment of compensation;
2. the actual handing over of goods, pursuant to a lease contract which provides for the passing of the right of ownership of the said goods under a suspensive condition or in the normal course of events;
3. the actual handing over of goods, pursuant to a lease contract which expressly provides for passing of the right of ownership of the goods; this provision shall not apply where passing of ownership of the goods is stipulated in the contract solely as an option;
4. the actual handing over of goods to a person acting in his own name and for the account of another.
(3) For the purposes of this Act, the following shall also be considered supply of goods effected for consideration:
1. the setting aside or handing over of goods for the private use or consumption of the taxable natural person, of the owner, of the factory or office workers thereof or of third parties and subject to the condition that credit for input tax has been deducted wholly or partly upon the production, importation or acquisition of the said goods;
2. the transfer of ownership or another right in rem to goods to third parties, effected free of charge, where credit for input tax has been deducted wholly or partly upon the production, importation or acquisition of the said goods.
3. (new, SG No. 106/2008, effective 1.01.2009) the dispatch or transportation of goods produced, extracted, processed, purchased, acquired or imported on the territory of the country by a taxable person in the course of its business activity when the goods are sent or transported for the purposes of its business activity from or for its account from the territory of the country to the territory of another Member State.
(4) Paragraph (3) shall not apply upon:
1. (supplemented, SG No. 95/2009, effective 1.01.2010) the handing over of special-purpose, working, uniform and presentable clothing and personal protection means by an employer to the factory and office workers thereof, including such under management contracts, for the purposes of the economic activity of the person;
2. the provision, free of charge, of goods of negligible value for advertising purposes or upon distribution of samples.
Intra-European Union Supply of Goods

Article 7. (1) “Intra-European Union supply of goods” shall be any supply of goods, transported by or for the account of the supplier who is a person registered under this Act, or of the recipient from the territory of the country to the territory of another Member State, where the recipient is a taxable person or a non-taxable legal person registered for VAT purposes in another Member State.
(2) Any supply of a new means of transport, dispatched or transported by or for the account of the supplier or of the recipient from the territory of the county to the territory of another Member State, regardless of whether the recipient is a taxable person or a non-taxable person, shall also be considered intra-European Union supply of goods.
(3) Any supply of excisable goods, dispatched or transported by or for the account of the supplier who is a person registered under this Act, or of the recipient from the territory of the country to the territory of another Member State, where the recipient is a taxable person or a non-taxable legal person which is not registered for VAT purposes in another Member State, shall also be considered intra-European Union supply of goods.
(4) The dispatch or transport of any goods produced, extracted, processed, purchased or imported into the territory of the country by a person registered under this Act within the framework of the economic activity thereof shall also be considered intra-European Union supply of goods effected for consideration, where the said goods are dispatched or transported for the purposes of the economic activity thereof by or for the account of the said person from the territory of the country to the territory of another Member State in which the said person is registered for VAT purposes.
(5) The following shall not be intra-European Union supply:
1. the supplies of any goods in respect of which the supplier applies the special procedure for taxation under Chapter Seventeen herein;
2. the supplies of any goods which are assembled or installed by or for the account of the supplier;
3. the supplies of any goods under Article 18 herein;
4. the supplies of any goods referred to in Items 1, 2 and 7 of Article 31 and Article 34 herein;
5. (amended, SG No. 94/2010, effective 1.01.2011) the supplies of natural gas through a natural gas system situated on the territory of the European Union or through a network connected to such a system, the supply of electricity or of heating or cooling energy through district heating or cooling networks;
6. the supplies by a person registered under this Act who is an intermediary in a triangular operation to the acquirer in a triangular operation;
7. the distance selling of goods effected under the identification number issued by the Member State whereto the goods have been dispatched or transported;
8. the dispatch and transport of any goods from the territory of the country to the territory of another Member State for the purpose of work on the said goods, which is carried out in that other Member State, provided that the said goods, after being worked upon, are re-dispatched to the sender within the territory of the country;
9. the dispatch and transport of any goods from the territory of the country to the territory of another Member State for the purpose of use of the said goods for the purposes of the supply of services within the territory of that other Member State, provided that the said goods are re-dispatched to the sender within the territory of the country after supply of the services;
10. the dispatch and transport of any goods from the territory of the country to the territory of another Member State, if the following conditions are simultaneously fulfilled:
(a) the import of the same goods from a third country or territory to the territory of that other Member State would be eligible for the arrangements for temporary importation with total exemption from import duty;
(b) the goods are re-dispatched to the sender within the territory of the country within a period not exceeding 24 months after their dispatch.
(6) (Amended, SG No. 113/2007) Where the conditions under Items 8 to 10 of Paragraph (5) no longer apply, intra-European Union supply for consideration shall be considered to be effected by that time.
Services

Article 8. “Services” within the meaning given by this Act, shall mean everything which has a value and which is other than goods, money in circulation and foreign currency used as legal tender.
Supply of Services

Article 9. (1) “Supply of services” shall be any performance of services.
(2) The following shall also be considered supply of services:
1. the sale or transfer of rights to intangible property;
2. the assumption of an obligation not to perform any acts or not to exercise any rights;
3. any manual and intellectual work, including treatment in the sense of production, construction or assembly of a tangible asset using raw and prime materials placed by the client at the disposal of the service provider;
4. the performance of services by a tenant/user for repair and/or improvement of an asset hired out or allocated for use.
(3) The following shall also be considered supply of services effected for consideration:
1. the provision of services for the private use of the taxable natural person, of the owner, of the factory and office workers or of third parties, the performance of which involves use of goods upon the production, importation or acquisition whereof credit for input tax has been wholly or partly deducted.
2. the provision, free of charge, of services for the private use of the taxable person, of the owner, of the factory or office workers or of third parties.
(4) Paragraph (3) shall not apply upon:
1. the provision, free of charge, of transport services from the place of residence to the place of work and back, by an employer to the factory and office workers thereof, including such under management contracts, where for the purposes of the economic activity of the person;
2. the performance, free of charge, of services by a tenant/user for repair of an asset hired out or allocated for use in the cases where the said asset was hired out or allocated for use to the tenant/user and has been actually used on a continuing basis for a period of not less than three years;
3. the performance, free of charge, of services by a concessionaire for improvement of an asset allocated for use, where this is a condition and/or obligation under the contract of concession;
4. the performance, free of charge, of services of negligible value for advertising purposes.
Where No Supply or Goods or Services Has Taken Place

Article 10. (1) No supply of goods or services has taken place where the supply to the transferee from the transforming corporation, from the transferor or from the contributor of a non-cash asset results from:
1. transformation of a commercial corporation according to the procedure established by Chapter Sixteen of the Commerce Act;
2. transfer of an enterprise according to the procedure established by Article 15 or Article 60 of the Commerce Act ;
3. contributing a non-cash asset in consideration of a capital allotment in a commercial corporation.
(2) In the cases covered under Paragraph (1), the recipient of the goods or services shall furthermore accede to all rights and obligations under this Act and in connection with them, including the right to deduct credit for input tax and of the obligations to adjust credit for input tax used.
(3) Paragraph (2) shall furthermore apply in the cases where the goods and services have been acquired by legal or testamentary succession by a taxable person under this Act.
(4) The procedure and the requisite documents for application of Paragraphs (2) and (3) shall be determined by the Regulations for Application of this Act.
Supplier and Recipient

Article 11. (1) “Supplier,” within the meaning given by this Act, shall be the person who effects the supply of goods or services.
(2) “Recipient,” within the meaning given by this Act, shall be the person who receives the goods or the services.
Taxable Supply

Article 12. (1) “Taxable supply” shall be each supply of goods or services within the meaning given by Articles 6 and 9 herein, where effected by a taxable person under this Act and whereof the place of transaction is within the territory of the country, as well as the zero-rated supplies effected by a taxable person, save in the cases in which this Act provides otherwise.
(2) A supply in which the recipient is a taxpayer under Chapter Eight herein shall not be subject to taxation by the supplier.
Intra-European Union Acquisition

Article 13. (1) “Intra-European Union acquisition” shall mean acquisition of the right of ownership of goods, as well as the actual receipt of goods in the cases under Article 6 (2) herein, which are dispatched or transported to the territory of the country from the territory of another Member State, where the supplier is a taxable person registered for VAT purposes in another Member State.
(2) The acquisition of a new means of transport, which is dispatched or transported to the territory of the country from the territory of another Member State, regardless of whether the supplier is a taxable person for VAT purposes in another Member State, shall also be considered an intra-European Union acquisition.
(3) (Amended, SG No. 106/2008, effective 1.01.2009) The receipt of goods within the territory of the country by a taxable person, which will be used for the purposes of the economic activity of the said person, shall also be considered an intra-European Union acquisition for consideration where the said goods are dispatched or transported by or for the account thereof from the territory of another Member State in which the person is registered for VAT purposes and where the said goods were produced, extracted, processed, purchased, acquired or imported thereby within the framework of the economic activity thereof.
(4) The following shall not be an intra-European Union acquisition:
1. the acquisition of any goods to which the supplier applies special arrangements for taxing of second-hand goods, works of art, collectors’ items and antiques, as regulated in the legislation of the relevant Member State;
2. the acquisition of any goods which are assembled or installed by or for the account of the supplier;
3. the acquisition of any goods covered under Article 18 herein;
4. the acquisition of any goods referred to in Items 1, 2 and 7 of Article 31 and Article 34 herein;
5. (amended, SG No. 94/2010, effective 1.01.2011) the acquisition of natural gas through a natural gas system situated on the territory of the European Union or through a network connected to such a system, the acquisition of electricity or of heating or cooling energy through district heating or cooling networks;
6. the acquisition of any goods by a person registered under this Act who is an acquirer in a triangular operation from an intermediary in a triangular operation;
7. the acquisition of any goods dispatched or transported from the territory of another Member State for the purpose of distance selling whereof the place of transaction is within the territory of the country, where selling is effected under the supplier’s identification number referred to in Article 94 (2) herein;
8. the receipt of any goods dispatched or transported from the territory of another Member State to the territory of the country for the purpose of work on the said goods, which is carried out within the territory of the country, provided that the said goods, after being worked upon, are re-dispatched to the sender within the territory of that other Member State;
9. the receipt of any goods dispatched or transported from the territory of another Member State to the territory of the country for the purpose of use of the said goods for the purposes of the supply of services within the territory of the country, provided that the said goods are re-dispatched to the sender within the territory of that other Member State after supply of the services;
10. the receipt of any goods dispatched or transported from the territory of another Member State to the territory of the country, if the following conditions are simultaneously fulfilled:
(a) the import of the same goods from the territory of the country would be eligible for the arrangements for temporary importation with total exemption from customs duty;
(b) the goods are re-dispatched to the sender within the territory of another Member State within a period not exceeding 24 months after their dispatch.
(5) (Amended, SG No. 113/2007) Where the conditions under Items 8 to 10 of Paragraph (4) no longer apply, intra-European Union acquisition for consideration shall be considered to be effected by that time.
(6) (New, SG No. 106/2008, effective 1.01.2009) Paragraph 3 shall furthermore apply to a person that is not registered for the purposes of value added tax in the Member State of the importation of the goods where the dispatch or transportation of the goods begins, if the goods are imported to the Member State of importation or for the account of the person.
Distance Selling of Goods

Article 14. (1) “Distance selling” shall be a supply of goods where the following conditions are simultaneously fulfilled:
1. the goods are dispatched or transported by or for the account of the supplier from the territory of a Member State other than the Member State in which the transport ends;
2. the supplier of the goods is registered for VAT purposes in a Member State other than the Member State in which the transport ends;
3. the recipient of the supply is a person who is not obliged to charge tax upon intra-European Union acquisition of the goods in the Member State where the transport ends;
4. the goods:
(a) are not new means of transport, or
(b) are not assembled and/or installed by or for the account of the supplier, or
(c) are not subject to special arrangements for taxing the price margin for second-hand goods, works of art, collectors’ items and antiques.
(2) For the purposes of Paragraph (1), where the goods are supplied, dispatched or transported from a third country or territory and are imported by the supplier into a Member State other than the Member State in which the transport to the recipient ends, the goods shall be deemed to be dispatched or transported from the Member State of import of the goods.
Triangular Operation

Article 15. “Triangular operation” shall be the supply of goods between three persons registered for VAT purposes in three different Member States A, B and C, where the following conditions are simultaneously fulfilled:
1. a registered person in Member State A (transferor) effects a supply of goods to a person registered for the purposes of VAT in Member State B (intermediary) who then effects a supply of the said goods to a person registered for the purposes of VAT in Member State C (acquirer);
2. the goods are transported directly from A to B;
3. the intermediary is not registered for VAT purposes in Member States A and B;
4. the acquirer charges VAT as a recipient of the supply.
Importation of Goods

Article 16. (1) “Importation of goods,” within the meaning given by this Act, shall be the introduction of non-European Union goods into the territory of the country.
(2) “Importation of goods” shall furthermore mean the release of goods for free circulation after placing under the outward processing procedure.
(3) “Importation of goods” shall furthermore mean the introduction of European Union goods into the territory of the country from third countries or territories which form part of the customs territory of the European Union.
(4) “Importation of goods” shall furthermore mean any other event from which a customs debt arises.
(5) Notwithstanding Paragraphs (1) to (4), where upon introduction into the territory of the country the customs status of goods in temporary storage is conferred on the goods or the goods are place in a free zone or free warehouse, or are placed under the customs procedures of: customs warehousing, inward processing, temporary importation with total exemption from duty, external transit, the importation shall be deemed effected when the goods cease to be under the relevant procedure within the territory of the country.

PART TWO
TAXATION OF SUPPLIES

Chapter One
PLACE OF TRANSACTION

Place of Supply of Goods

Article 17. (1) “Place of supply of goods which are not dispatched or transported” shall mean the place where the goods are when ownership passes or upon the actual handing over of the goods under Article 6 (2) herein.
(2) “Place of supply of goods which are dispatched or transported either by the supplier or by the recipient or by a third person” shall be the place where the goods are at the time when dispatch or transport to the recipient begins.
(3) “Place of supply of goods by an intermediary in a triangular operation to an acquirer in a triangular operation” shall be the Member State where the acquirer in a triangular operation is registered for VAT purposes.
(4) “Place of supply of goods which are assembled or installed by or for the account of the supplier” shall be the place where the goods are assembled or installed.
Place of Supply of Goods Effected on Board Ships, Aircraft and Trains

Article 18. (1) (Amended, SG No. 95/2009, effective 1.01.2010) The place of supply of goods and restaurant and catering services effected on board ships, aircraft or trains during a transport of passengers shall be the territory of the country where:
1. the point of departure of the transport of passengers is within the territory of the country and the point of arrival of the transport of passengers is within the territory of another Member State without a stop in the territory of a third country or territory, or
2. the point of departure of the transport of passengers is within the territory of the country and the point of arrival of the transport of passengers is within the territory of a third country or territory without a stop in the territory of another Member State, or
3. the point of departure of the transport of passengers is within the territory of a third country or territory and the point of arrival is within the territory of another Member State and the first stop within the territory of the European Union has taken place within the territory of the country, or
4. the transport of passengers is effected between two points within the territory of the country.
(2) (Amended, SG No. 95/2009, effective 1.01.2010) The place of supply of goods and restaurant and catering services effected on board ships, aircraft or trains during a transport of passengers shall be determined according to the procedure established by Items 2 and 3 of Paragraph (1) solely in respect of the part of the transport of passengers effected between the territory of the country and the other Member States.
(3) (Amended, SG No. 95/2009, effective 1.01.2010) In the cases not covered by Paragraphs (1) and (2), the place of supply of goods and restaurant and catering services effected on board ships, aircraft or trains during a transport of passengers shall be outside the territory of the country.
Place of Supply of Natural Gas and Electricity

Article 19. (Amended, SG No. 94/2010, effective 1.01.2011) The place of execution when it comes to supply of natural gas through a natural gas system situated on the territory of the European Union or a network connected to such a system or when it comes to supply of electricity or of heating or cooling energy through district heating or cooling networks shall be:
1. the place of the registered office or fixed establishment of the recipient for whom the goods are supplied or, in the absence of such an office or establishment, the place where the said recipient, who is a taxable dealer of natural gas or electricity or of heating or cooling energy, has his permanent address or usually resides;
2. the place where the goods are effectively consumed: where a person other than the person referred to in Item 1 is a recipient;
3. the place where the recipient (for whom the goods are supplied) referred to in Item 2 has his registered office or fixed establishment or, in the absence of such an office or establishment, the place where the recipient referred to in Item 2, has his permanent address or usually resides – when the entire amount of gas, electricity or heating or cooling energy or part of it are not actually consumed by the recipient but are rather the subject of a subsequent supply..
Place of Supply under Terms of Distance Selling

Article 20. (1) The place of supply of goods under the terms of distance selling referred to in Article 14 herein shall be the territory of the Member State where the transport ends and where the following conditions are simultaneously fulfilled:
1. the supplier is a person registered under this Act on grounds other than for registration for intra-European Union acquisition;
2. the supplies effected by the person referred to in Item 1 under the terms of distance selling for a Member State exceed the threshold established in the legislation of that Member State for the current calendar year or have exceeded the said threshold for the last preceding calendar year.
(2) The place of supply under the terms of distance selling shall be the territory of the country where the following conditions are simultaneously fulfilled:
1. the supplier is a person registered for VAT purposes in another Member State;
2. the supplies effected under the terms of distance selling for the territory of the country will exceed the amount of BGN 70,000 for the current calendar year or have exceeded the said amount for the last preceding calendar year.
(3) The amount referred to in Item 2 of Paragraph (2) shall be net of the VAT due in the Member State where the supplier is registered for VAT purposes on the supplies of any goods other than excisable goods.
(4) Where excisable goods for the private consumption of a natural person who is not a sole trader are subject of the supply, the place of supply under the terms of distance selling shall be the place where the goods arrive or the transport ends.
(5) Where the conditions referred to in Item 2 of Paragraph (1) are not fulfilled, the place of supply shall be the territory of the country, with the exception of the cases where the supplier has notified the territorial directorate exercising competence over the place of registration that the said supplier wishes that the place of supply be the territory of another Member State, where the transport ends, and the said supplier is registered for VAT purposes in that other Member State.
(6) Paragraph (2) shall not apply where the place of supply is the territory of the country, where the supplier is registered in pursuance of Article 100 (3) herein.
Place of Supply of Services

Article 21. (Amended, SG No. 108/2006, SG No. 41/2007, supplemented, SG No. 113/2007, amended, SG No. 95/2009, effective 1.01.2010) (1) The place of supply of services, in the case of a non-taxable legal person being the recipient, shall be the place where the supplier has established his economic activity conducted independently. Where these services are provided from a fixed establishment different from the place in which the supplier has established his economic activity conducted independently, the place of supply shall be the location of the fixed establishment. In the absence of a place of establishment of economic activity conducted independently or a fixed establishment, the place of supply shall be the place where the supplier has his permanent address or usually resides.
(2) The place of supply of services, in the case of a taxable person being the recipient, shall be the place where the recipient has established his economic activity conducted independently. Where these services are provided to a fixed establishment different from the place in which the recipient has established his economic activity conducted independently, the place of supply shall be the location of the fixed establishment. In the absence of a place of establishment of economic activity conducted independently or a fixed establishment, the place of supply shall be the place where the recipient has his permanent address or usually resides.
(3) Where the recipient under paragraph 2 uses the services exclusively for personal needs or for the personal needs of his staff, the place of supply shall be determined in accordance with the provisions of paragraph 1.
(4) The place of supply of services shall be:
1. the place where the immovable property is situated, where the supply of services is connected with immovable property, including upon:
(a) the granting of rights to use, expert services or the services of estate agents;
(b) the services for preparing and coordinating construction works connected with immovable property, such as architectural, engineer, supervisory etc.;
c) the accommodation at hotels, camping sites, caravan parks, holiday camps and others of this type;
2. the place where passenger transport services are provided proportionately in terms of distances covered;
3. (amended, SG No. 94/2010, effective 1.01.2011) the place where the event actually takes place – in the cases of supply of a service for providing access (in exchange for tickets or consideration covering the entry fee, including when the entry fee is included in a subscription) to cultural, artistic, sports, scientific, educational, entertainment or other similar events (including fairs and exhibitions) and in the cases of services accompanying the granting of access, when the service is provided to a taxable person;
4. (amended, SG No. 94/2010, effective 1.01.2011) the place where the service is actually provided to a non-taxable person in the following cases:
a) services and their accompanying services associated with cultural, artistic, sports, scientific, educational, entertainment or other similar events (including fairs and exhibitions), including the activity of organizing them;
b) services relating to transport handling of goods;
c) services connected with the valuation, expert examination or work on a movable item.
5. the place in which the services are actually provided in the case of supply of restaurant and catering services.
(5) The place of supply of services shall be the place where the recipient is established or has his permanent address or usually resides, where the following conditions are simultaneously fulfilled:
1. the recipient is a non-taxable person established outside the European Union, or has his permanent address or usually resides outside the European Union.
2. the services supplied are:
(a) assignment or transfer of licence, patent, copyright, trade mark, know-how rights or other similar industrial or intellectual property rights, as well as transfer of rights to software products other than standard software;
(b) advertising services;
(c) services performed by consultants, engineers, consultancy bureaux, accountants, lawyers and other similar services, including the services for the redesign or finishing of software;
(d) data processing or supplying of information;
(e) banking, financial, social insurance, insurance and reinsurance services, with the exception of the hire of safes;
(f) supply of staff;
(g) hiring out of movable things, with the exception of all types of means of transport;
(h) electronic communications services;
(i) radio and television broadcasting services;
(j) electronically supplied services;
(k) (amended, SG No. 94/2010, effective 1.01.2011) services for the provision of access to a natural gas system situated on the territory of the European Union or to a network connected to such a system, to the electricity system or to the district heating or cooling networks, or services for transmission or distribution through these systems or networks and the supply of other services directly related to them;
(l) assumption of an obligation not to perform any acts or not to exercise any rights referred to in Litterae (a) to (k);
(m) the services of intermediaries performed by a person acting in the name of and for the account of another, in connection with the services referred to in Litterae (a) to (l).
(6) The place of provision of electronic communications services and radio and television broadcasting services shall be the territory of the country, where the following conditions are simultaneously fulfilled:
1. the recipient of the said supplies is a non-taxable person who is established, has his permanent address or usually resides within the territory of the country;
2. the supplier is a taxable person with registered office or a fixed establishment from which the said supplier carries out his economic activity outside the European Union or, in the absence of such an office or establishment, the place of his permanent address or the place in which he usually resides outside the European Union;
3. the services are effectively used within the territory of the country.
(7) The place of supply of electronically supplied services shall be the territory of the country, where the following conditions are simultaneously fulfilled:
1. the recipient of the said supplies is a non-taxable person who is established, has a permanent address or usually resides within the territory of the country;
2. the supplier is a taxable person whose registered office or fixed establishment is outside the European Union or, in the absence of such an office or establishment, whose permanent address or place in which he usually resides is outside the territory of the European Union.
Place of Supply of Services in Transport of Goods

Article 22. (Supplemented, SG No. 108/2006, SG No. 108/2007, amended, SG No. 95/2009, effective 1.01.2010) (1) The place of supply of services in the intra-European Union transport of goods to a non-taxable person shall be the territory of the Member State of departure.
(2) The place of supply of transport of goods outside the European Union provided to a non-taxable person shall be the place where the transport is carried out, proportionately in terms of distances covered.
(3) The place of supply of transport of goods within or outside the European Union provided to a taxable person shall be determined in accordance with the provisions of Article 21, paragraphs 2 and 3.
(4) For the purposes of this Act, forwarding, courier and postal services other than those under Article 49 provided in connection with the transport of goods within or outside the European Union shall be considered to be intra-European Union transport of goods or transport of goods outside the European Union respectively.
(5) A forwarding service under paragraph 4 shall be the service for the organization, conduct or handling of transport of goods within or outside the European Union, together with the activities included in it for the transport handling, document processing, storage and insurance.
(6) The provisions of Article 127 shall not apply, where a forwarding agent acts under a forwarding contract and provides forwarding services in connection with the supply of transport of goods within or outside the European Union.
Place of Supply of Services Connected with the Rent of All Types of Vehicles

Article 23. (Amended, SG No. 108/2006, SG No. 95/2009, effective 1.01.2010) (1) The place of supply of a service connected with the short-term rent/short-term provision of vehicles for use shall be the place in which the vehicles are actually put at the disposal of the recipient.
(2) Short-term rent/short-term provision for vehicles for use under paragraph 1 shall be the continuous holding or use of the vehicle for up to 30 days or, in the case of vessels, for up to 90 days.
(3) There is no short-term rent/provision for use in any of the following cases:
1. where automatic renewal of the holding/use is agreed and both parties refrain from action;
2. where at least two fixed-term contracts for up to 30 days or up to 90 days for vessels follow one another without any interruption or with an interruption of up to two days in connection with the same vehicles and the total term exceeds the maximum term of 30/90 days; this provision shall not apply where the renewal is due to clearly established circumstances beyond the control of the parties to the supply;
3. where the agreed term exceeds 30 days or 90 days for vessels but it is terminated earlier due to clearly established circumstances beyond the control of the parties of the supply and, as a result, the actual term corresponds to the short-term rent.
Place of Supply of Services by Intermediaries

Article 24. (Amended, SG No. 108/2006, No. 113/2007, SG No. 95/2009, effective 1.01.2010) (1) The place of supply of services by an intermediary acting in the name of and for the account of another person provided to a non-taxable person shall be the place of the underlying supply in connection with which the intermediary has acted.

Chapter Two
CHARGEABLE EVENT AND TAXABLE AMOUNT

Occurrence of Chargeable Event and Chargeability of Tax

Article 25. (1) “Chargeable event,” within the meaning given by this Act, shall be the supply of goods or services effected by taxable persons under this Act, the intra-European Union acquisition, as well as the importation of goods under Article 16 herein.
(2) A chargeable event shall occur on the date on which ownership of the goods passes or on which the services are performed.
(3) In addition to the cases referred to in Paragraph (2), a chargeable event shall occur on:
1. (supplemented, SG No. 108/2007) the date of actual handing over of the goods under Article 6 (2) herein, except for the cases under Paragraph (8);
2. the date of setting aside or handing over of the goods under Article 6 (3) herein;
3. the date on which the transport under Article 7 (4) herein starts;
4. the date on which the supplier receives the payment: applicable to sale of goods by mail order or by electronic means;
5. the date of retrieval of the coins or tokens: applicable to effecting of supplies by means of vending machines or other similar devices actuated by coins, tokens or other such;
6. the date of the actual return of the asset repaired and/or improved upon termination of the contract or discontinuance of the use of the asset: in the cases of performance, free of charge, by a tenant/user of services for repair and/or improvement of an asset hired out or allocated for use, where the conditions under Items 2 and 3 of Article 9 (4) herein do not apply.
(4) (Amended, SG No. 108/2006) In supplies effected periodically, by stages or continuously, with the exception of the supplies covered under Article 6 (2) herein, each period or stage for which payment has been agreed shall be considered to be a separate supply and the chargeable event for it shall occur on the date on which the payment became executable.
(5) (New, SG No. 95/2009, effective 1.01.2010) The provisions of paragraph 4 shall not apply to supplies with continuous performance for more than a year, for which no chargeability exists for a period of more than a year. In the case of such supplies, the chargeable event shall be considered to have taken place at the end of each calendar year and, in the calendar year in which supplies are terminated, the chargeable event shall occur on the date of termination of the supplies.
(6) (Renumbered from Paragraph 5, SG No. 95/2009, effective 1.01.2010) On the date of occurrence of the chargeable event under Paragraphs (2), (3) and (4):
1. the tax under this Act shall become chargeable in respect of the taxable supplies and an obligation for the registered person to charge the said tax shall arise, or
2. grounds shall arise for exemption from the charging of tax in respect of the exempt supplies and the supplies whereof the place of transaction is outside the territory of the country.
(7) (Amended, SG No. 113/2007, supplemented, SG No. 106/2008, effective 1.01.2009, renumbered from Paragraph 6, SG No. 95/2009, effective 1.01.2010) Where an advance payment in full or in part is effected on a supply before the occurrence of a chargeable event under Paragraphs (2), (3) and (4), the tax shall become chargeable upon receipt of the payment (for the payment amount), with the exception of a payment received in connection with an intra-European Union supply. In these cases it is deemed that the tax is included in the amount of the payment.
(8) (Renumbered from Paragraph 7, SG No. 95/2009, effective 1.01.2010) Where a person who is not registered under this Act receives an advance payment in connection with a taxable supply and actually effects the said supply after the date of registration of the said person under this Act, the advance payment received shall be presumed to include a tax which becomes chargeable on the date on which the tax on the supply becomes chargeable.
(9) (New, SG No. 108/2007, renumbered from Paragraph 8, SG No. 95/2009, effective 1.01.2010) The chargeable event for supply under Item 4 of Article 6 (2) of newspapers, magazines, books and other publications, music audio and video recordings and recordings of films on electronic or technical medium shall occur at the earlier of the following two dates:
1. the date on which the principal/mandator receives the payment from the commission agent/mandatory under Article 127, or
2. the last day of the quarter following the tax period in which actual handing over of the goods under Item 4 of Article 6 (2) is carried out.
Taxable Amount in Supplies within the Territory of the Country

Article 26. (1) “Taxable amount,” within the meaning given by this Act, shall be the value whereon the tax is charged or not charged depending on whether the supply is taxable or exempt.
(2) The taxable amount shall be determined on the basis of everything which constitutes the consideration which has been obtained by or is due to the supplier from the recipient or another person in connection with the supply, expressed in leva and stotinki exclusive of the tax under this Act. Any payment of interest and damages of a compensatory nature shall not be considered a consideration for a supply.
(3) The taxable amount referred to in Paragraph (2) shall be credited with:
1. all other taxes and fees, including excise duty, where such are payable on the supply;
2. all subsidies and investment grants directly linked to the supply;
3. the incidental expenses charged by the supplier to the recipient, such as commission, packing, transport, insurance costs etc., directly linked to the supply;
4. the cost of the usual or customary packing materials or containers, unless returnable or if the recipient is not a taxable person; if such packing materials or containers are returned by the recipient, the taxable amount shall be debited with the value of the said materials or containers upon return.
(4) The taxable amount shall be deemed to include:
1. the value of the subsequent warranty services for the goods;
2. the value retained by the recipient as a performance bond.
(5) The taxable amount shall not include:
1. the amount of the trade discount or rebate, if allowed to the recipient on the date of occurrence of the chargeable event; if the said discount or rebate is allowed to the recipient after the date of occurrence of the chargeable event, the taxable amount shall be debited therewith upon allowance;
2. the cost of the usual or customary packing materials or containers, if the recipient is a taxable person and the said materials or containers are returnable; if such materials or containers are not returned within 12 months after dispatch thereof, the taxable amount shall be credited with the value of the said materials or containers at the end of this time period;
3. the costs incurred by a lessor and lessee in connection with the use of goods under the terms and within the term of validity of a lease contract, such as: costs of property insurance, civil liability insurance and other such, for all or part of the term of validity of the contract, the costs of property taxes and fees, environmental fees and registration costs;
4. the amounts paid to the supplier as repayment for the expenses incurred in the name and for the account of the recipient, where the said amounts are expressly entered in the accounts of the supplier; the supplier must hold proof of the actual amount of this expenditure and shall not have the right to credit for input tax in respect of the tax which may have become chargeable upon the incurrence of the said expenditure.
(6) (Amended, SG No. 113/2007) Where the values required for calculation of the taxable amount are expressed in a foreign currency, the taxable amount shall be determined on the basis of the lev equivalent of the said currency at the exchange rate announced by the Bulgarian National Bank for the date on which the tax became chargeable.
(7) (Amended, SG No. 95/2009, effective 1.01.2010, SG No. 94/2010, effective 1.01.2011) Where the consideration is expressed wholly or partly in goods or services (the payment is effected wholly or partly in goods or services), the taxable amount of each supply shall be the open market value of the goods or services provided, calculated at the date on which the tax became chargeable.
(8) (New, SG No. 95/2009, effective 1.01.2010) In the case of supplies under Article 25, paragraph 5, the taxable amount shall be established proportionately to the number of months in the respective calendar year compared to the total number of the months of supply, including the month in which supplies are terminated.
Special Cases of Determination of Taxable Amount

Article 27. (1) The taxable amount of the supply may not be less than the taxable amount upon acquisition of the costs or than the cost price, and in the cases where the goods are imported, than the taxable amount upon importation, for any supplies of:
1. goods under Article 6 (3) and Article 7 (4) herein;
2. land which is a regulated lot within the meaning given by the Spatial Development Act , with the exception of building land of buildings which are not new;
3. new buildings or parts thereof and the building land thereof.
(2) The taxable amount of supplies of services under Article 9 (3) herein shall be the amount of the direct costs incurred in connection with the performance of the said services.
(3) The taxable amount shall be the open market value in respect of the following supplies:
1. any supplies between connected persons;
2. (supplemented, SG No. 108/2007) any supplies of goods and/or services under Article 111 herein;
3. any supplies effected free of charge under Item 4 of Article 9 (2) herein.

Chapter Three
ZERO-RATED SUPPLIES

Supplies of Goods Dispatched or Transported to Destination outside
Territory of European Union

Article 28. The following shall be supplies liable to tax at the zero rate:
1. the supply of any goods which are dispatched or transported from a place within the territory of the country to a destination in a third country or territory, by or for the account of the supplier;
2. the supply of any goods which are dispatched or transported from a place within the territory of the country to a destination in a third country or territory, by or for the account of the recipient, if the recipient is a person who is not established within the territory of the country; this provision shall not apply where the goods are intended for the fuelling, equipment and provisioning of vessels and aircraft which are used for sporting and entertainment purposes or for private use.
International Transport of Passengers

Article 29. (1) Transport of passengers shall be a supply liable to tax at the zero rate where the transport is effected:
1. from a place within the territory of the country to a destination outside the territory of the country, or
2. from a place outside the territory of the country to a destination within the territory of the country, or
3. between two places within the territory of the country, where the transport is not part of a transport referred to in Items 1 and 2.
(2) The transport of goods and motor vehicles, where they are part of the luggage of passengers, shall also be considered as transport of passengers under Paragraph (1).
International Transport of Goods

Article 30. (1) (Previous Article 30, SG No. 108/2007) Transport of goods shall be a supply liable to tax at the zero rate where the transport is effected:
1. from a place within the territory of the country to a destination within the territory of a third country or territory or to a destination within the territory of the islands making up the autonomous regions of the Azores and Madeira, or
2. from the territory of a third country or territory or from the territory of the islands making up the autonomous regions of the Azores and Madeira to a destination within the territory of the country, or
3. between two places within the territory of the country, where the transport is not part of a transport referred to in Items 1 and 2.
(2) (New, SG No. 108/2007) For the purposes of this Act, forwarding, courier and postal services other than those referred to in Article 49 provided in connection with international transport of goods under Paragraph (1) shall be equivalent to international transport services under Paragraph (1).
(3) (New, SG No. 108/2007) A forwarding service under Paragraph (2) shall be a service for organizing, carrying out or handling international transport of goods under Paragraph (1) and related activities involving transport handling, customs clearance, storage and insurance.
(4) (New, SG No. 108/2007) Where a forwarder acts under the terms and conditions of a forwarding contract and provides a forwarding service related to supply of services for international transport of goods under Paragraph (1), the provision of Article 127 shall not apply.
Supply Linked to International Transport

Article 31. (Amended and supplemented, SG No. 108/2006, SG No. 108/2007, amended, SG No. 95/2009, effective 1.01.2010) The following shall be supplies liable to tax at the zero rate:
1. the supply of goods for the equipping with spare parts, fuelling and lubricating, and provisioning with food, beverages, water and other victuals intended for consumption on board of aircraft used by an aviation operator performing mainly international flights;
2. the supply of goods for the equipping with spare parts, fuelling and lubricating, and provisioning with food, beverages, water and other victuals intended for consumption on board of:
(a) vessels used for transportation of goods or passengers in high seas;
(b) vessels used for commercial, industrial or fishing activities in high seas;
(c) vessels used for rescue of life and property at sea;
(d) vessels of war as defined in subheading 89.01 of the Common Customs Tariff, leaving the country and bound for foreign ports or anchorages;
(e) vessels used for coastal fishing, except for their provisioning;
3. the supply of services for the building, maintenance, repair, modification, transformation, assembly, equipping, furnishing, transport and demolition of vessels and aircraft, with the exception of those referred to in Item 2 (c); this provision shall not apply to aircraft , except for those under item 1, as well as vessels used for sporting and entertainment purposes or for private use;
4. the chartering of:
(a) vessels used for transportation of goods or passengers and for commercial, industrial or fishing activities in high seas; this provision shall not apply to vessels used for sporting and entertainment purposes or for private use;
(b) aircraft used by an aviation operator performing mainly international flights;
5. the handling of:
(a) vessels used for transportation of goods or passengers and for commercial, industrial or fishing activities in high seas, except for vessels used for sporting and entertainment purposes or for private use;
(b) aircraft used by an aviation operator performing mainly international flights;
6. the supply of services linked to transport handling of goods or passengers, including transport containers transported on board of:
(a) vessels used for transportation of goods or passengers and for commercial, industrial or fishing activities in high seas, except for vessels used for sporting and entertainment purposes or for private use;
(b) aircraft used by an aviation operator performing mainly international flights or railway rolling stock, where services are provided in connection with international transport;
7. the supply of vessels and aircraft, with the exception of those used for sporting and entertainment purposes or for private use.
8. the rendering of services, for which fees are collected under Article 120, paragraph 1 of the Civil Aviation Act, rendered by an airport operator – concessionaire in relation to aviation facilities in an international flight, including in the European Union;
9. the supply of services under Chapter Nine of the Merchant Shipping Code, rendered to vessels; this shall not apply to vessels which are used for sporting and entertainment purposes or for private use;
10. the supply of services for rescue of life or property at sea.
11. (new, SG No. 94/2010, effective 1.01.2011) the supply of services for air traffic control and aeronavigational services, provided to aircraft used by an aviation operator performing predominantly international flights.
Supply Linked to International Goods Traffic

Article 32. (1) (Amended, SG No. 108/2006) The supply of non-European Union goods, with the exception of such specified in Annex 1 hereto in respect of which the circumstances covered under Article 16 (5) herein apply, shall be a supply liable to tax at the zero rate.
(2) (Amended, SG No. 113/2007) A supply liable to tax at the zero rate shall be the supply of services involving loading, unloading, re-loading, arrangement, strengthening of the goods and/or customs clearance, where these are rendered in connection with the supply of goods liable to tax at the zero rate under Paragraph (1), with the exception of the supplies exempt within the meaning given by this Act.
Supply for Handling of Goods

Article 33. The performance of services involving work on goods, such as treatment, processing or repair or goods, shall be a supply liable to tax at the zero rate where the following conditions are fulfilled:
1. the goods are acquired or imported for the purposes of performance of such work within the territory of the European Union;
2. after being worked upon, the goods are dispatched or transported to a third country or territory by or for the account of the supplier or the recipient;
3. the recipient of the goods is not established within the territory of the country.
Supply of Gold for Central Banks

Article 34. The supply of gold other than investment gold within the meaning given by this Act shall be a supply liable to tax at the zero rate where the recipient is the Bulgarian National Bank or the Central Bank of another Member State.
Supply Linked to Duty-Free Trade

Article 35. (Supplemented, SG No. 105/2006) The sales of goods in duty- free distributive trade establishments shall be a supply liable to tax at the zero rate when the sale is considered to be export as defined by the Duty Free Sales Act.
Supply of Goods Provided by Agents, Brokers and Other Intermediaries

Article 36. (1) The supply of goods provided by agents, brokers and other intermediaries acting in the name and for the account of another shall be a supply liable to tax at the zero rate where linked to the supplies specified in this Chapter.
(2) (Repealed, SG No. 113/2007).
Documenting Supplies

Article 37. (1) The documents certifying the existence of circumstances under this Chapter shall be specified by the Regulations for Application of this Act.
(2) (Amended, SG No. 108/2007) If the supplier fails to obtain the documents referred to in Paragraph (1) prior to the lapse of the calendar month succeeding the calendar month during which the tax became chargeable, the provisions of this Chapter shall not apply. If the supplier obtains the documents referred to in Paragraph (1) subsequently, the supplier shall adjust the result of the application of this Paragraph according to a procedure established by the Regulations for Application of this Act.
(3) (New, SG No. 108/2007) Paragraph 2 shall not apply to advance payments received.

Chapter Four
EXEMPT SUPPLIES AND ACQUISITIONS

General Dispositions

Article 38. (1) The supplies specified in this Chapter shall be exempt from tax.
(2) Any intra-European Union supplies shall likewise be exempt if they would have been exempt if effected within the territory of the country according to the procedure established by this Chapter.
(3) Any intra-European Union acquisition of goods, whose supply within the territory of the country is an exempt supply under this Chapter, shall likewise be exempt from taxation.
Supply Linked to Health Care

Article 39. The following supplies shall be exempt:
1. (supplemented, SG No. 94/2010, effective 1.01.2011) the performance of health (medical) services and of services directly linked thereto, rendered by health-care facilities and creches under the Health Act and by medical-treatment facilities under the Medical-Treatment Facilities Act;
2. the supply of human organs, tissues and cells, blood, blood components and milk;
3. the supply of prostheses, as well as the services for provision of prostheses to people with disabilities, where the said supplies are part of the health services referred to in Item 1;
4. (new, SG No. 108/2007, amended, SG No. 106/2008, effective 1.01.2009) the supply of implantable medical devices driven by power generated by the human body or gravity, as well as actively implantable medical devices where the supply is part of the health services under item 1;
5. (renumbered from item 4, SG No. 108/2007, supplemented, SG No. 94/2010, effective 1.01.2011) the supply of dental prostheses by dentists or dental technicians;
6. (renumbered from item 5, SG No. 108/2007) the performance of transport services for sick or injured persons in vehicles specially designed for the purpose by duly authorized bodies;
7. (renumbered from item 6, SG No. 108/2007) the supply of goods and services within the framework of humanitarian activity carried out by the Bulgarian Red Cross and other not-for-profit legal entities pursuing public-benefit activities and entered into the Central Register of Not-for-Profit Legal Entities for Pursuit of Public-Benefit Activities.
Supply Linked to Welfare and Social Security Work

Article 40. The following supplies shall be exempt:
1. the performance of social services under the Social Assistance Act;
2. the supply of social assistance benefits according to the procedure established by the Social Assistance Act;
3. the compulsory and voluntary social, retirement and health insurance under the terms and according to the procedure established by a special law, including the intermediation services directly linked thereto.
Supply Linked to Education, Sports or Physical Education

Article 41. The following supplies shall be exempt:
1. (supplemented, SG No. 94/2010, effective 1.01.2011) pre-school instruction and character education, school or university education, vocational education and training, post-graduate training, retraining and upgrading of qualifications, training for acquisition of core competences, provided by:
(a) (supplemented, SG No. 94/2010, effective 1.01.2011) kindergartens, schools or auxiliary units under the Public Education Act, institutions within the vocational education and training system under the Vocational Education and Training Act, suppliers of training for acquisition of core competences included in a list approved by the Executive Director of the Employment Agency or cultural and educational or research institutions;
(b) higher schools under the Higher Education Act;
2. tuition given privately by teachers, covering school or university education under Item 1;
3. (amended, SG No. 74/2009, effective 15.09.2009) the supply of textbooks and teaching aids, approved by the Minister of Education, Youth and Science or by the Minister of Culture in accordance with the endorsed compulsory teaching and educational syllabi and curricula, where the said goods are supplied by the organizations covered under Item 1 (a), as well as the supply of textbooks and teaching aids, where the said goods are supplied by the organizations covered under Item 1 (b);
4. the services directly linked to sports or physical education, provided by sporting organizations under the Physical Education and Sports Act which are registered under the Non-Profit Legal Persons Act as organizations designated for pursuit of public-benefit activities.
Supply Linked to Culture

Article 42. The following supplies shall be exempt:
1. charges by cultural organizations and cultural institutions under the Protection and Promotion of Culture Act for admissions to:
(a) circuses, music and musical performing-arts shows and concerts, with the exception of admissions to bars, variety show bars and erotic shows;
(b) museums, art galleries, libraries and theatres;
(c) zoos and botanical gardens;
(d) architectural, historical, archaeological, ethnographic and museum reserves and complexes;
2. the activities of the Bulgarian National Radio, the Bulgarian National Television and the Bulgarian News Agency for which they receive payment from the executive budget.
Supply Linked to Religious Denominations

Article 43. The supply of goods and the performance of services by the Bulgarian Orthodox Church and other registered religious denominations under the Religious Denominations Act shall be an exempt supply where the said supply is linked to the performance of their religious, social, educational and health activities.
Supply of Non-Profit-Making Nature

Article 44. (1) The following supplies shall be exempt:
1. the supply of goods and the performance of services by the organizations covered under Articles 39, 40, 41 and 42 herein, where the said supply is linked to fund-raising events organized for the benefit of the activities of the said organizations;
2. the supply of goods and the performance of services by organizations which are not merchants and which have aims of a political, trade-union, religious, patriotic, philosophical, philanthropic or civic nature, where the said supply is linked to fund-raising events organized for the benefit of the activities of the said organizations;
3. the supply of goods and the provision of services by the organizations referred to in Item 2 for the benefit of their members in return for a subscription fixed in accordance with the rules of the said organizations;
4. the provision of services by independent groups of persons whose activities are exempt from or are not subject to tax for the purpose of rendering their members the services directly necessary for the exercise of their activity, where these groups merely claim from their members exact reimbursement of their share of the joint expenses;
5. (new, SG No. 108/2007, repealed, SG No. 95/2009, effective 1.01.2010).
(2) The supplies covered under Paragraph (1) shall be exempt insofar as they do not lead to distortion of competition.
Supply Linked to Land and Buildings

Article 45. (1) The transfer of the right of ownership of land, the creation or transfer of limited rights in rem to land, as well as the letting or leasing of land, shall be an exempt supply.
(2) The creation or transfer of a building right shall be considered an exempt supply under Paragraph (1) until the time of completion of rough construction work on the building for which the building right is created or transferred. The building right shall not cover the building and erection works performed.
(3) The supply of buildings or parts thereof, which are not new, the supply of building land, as well as the creation and transfer of other rights in rem thereto, shall likewise be an exempt supply.
(4) The letting of a building or part thereof for residential use to a natural person who is not a merchant shall likewise be an exempt supply.
(5) Paragraph (1) shall not apply in respect of:
1. the transfer of a right of ownership of a regulated lot within the meaning given by the Spatial Development Act , with the exception of the building land of buildings which are not new;
2. the transfer of a right of ownership or other rights in rem, as well as the letting of plant, machinery, equipment and structures immovably fixed to or built under the ground;
3. the transfer of a right of ownership or other rights in rem, as well as the letting of camping sites, caravan parks, holiday camps, sites for parking vehicles and other such;
4. the transfer of a right of ownership of building land of new buildings, as well as the creation and transfer of other rights in rem to such land.
(6) Paragraph (4) shall not apply to provision of accommodation in hotels, motels, cottage villages and holiday villages, rented rooms in family houses, villas, houses, cabanas, camping sites, hikers’ chalets, guest houses, inns, boarding houses, caravan parks, holiday camps, holiday accommodations owned by businesses for their employees, spa centres and sanatorium complexes.
(7) In the cases of supplies covered under Paragraphs (1), (3) and (4), the supplier shall be allowed a right of option for taxation.
Supply of Financial Services

Article 46. (1) The following supplies shall be exempt:
1. the negotiation, the granting and the management of credit for a consideration (interest) by the person granting it, including the granting, negotiation and management of credit upon supply of goods pursuant to a lease contract;
2. the negotiation of guarantees and transactions in guarantees or securities establishing title to money receivables, as well as management of guarantees by the creditor;
3. (amended, SG No. 23/2009, effective 1.11.2009) the transactions, including negotiation, concerning payment accounts, payment services electronic cash, payments, debts, receivables, cheques and other such negotiable instruments, excluding transactions concerning debt collection and factoring and the hire of safes;
4. the transactions, including negotiation, concerning currency, banknotes and coins used as legal tender, with the exception of banknotes and coins which are not normally used as legal tender or are of numismatic interest;
5. the transactions, including negotiation, concerning corporate interests, shares or other securities and derivatives thereof, with the exception of management and safekeeping; this shall not apply to any securities establishing titles to goods or services other than such specified in this Article;
6. (amended and supplemented, SG No. 52/2007) management of the activity of collective investment schemes, investment companies of the closed-end type and pension funds, and the provision of investment advice according to the procedure established by the Public Offering of Securities Act, and the Markets in Financial Instruments Act;
7. the transactions, including negotiation, concerning financial-futures contracts and options.
(2) In the cases of a supply pursuant to a lease contract under Item 1 of Paragraph (1), the supplier shall be allowed a right of option for taxation of the granting of the credit.
(3) In respect of the supplier of the financial services covered under Item 1 of Paragraph (1), credit for input tax shall become fully deductible in compliance with the requirements of Article 71 herein for the goods subject to the lease contract.
Supply of Insurance Services

Article 47. The performance of services under the terms and according to the procedure established by the Insurance Code shall be an exempt supply where performed by:
1. (supplemented, SG No. 108/2006) insurers and reinsurers;
2. insurance brokers and insurance agents.
Gambling

Article 48. The organizing of games of chance, within the meaning given by the Gambling Act , shall be an exempt supply.
Supply of Postage Stamps and Postal Services

Article 49. The following supplies shall be exempt:
1. the supply at face value of postage stamps or an indication equivalent to a postage stamps;
2. the performance of a universal postal service under the terms and according to the procedure established by the Postal Services Act.
Supply of Goods or Services for which Credit for Input Tax Has Not Been
Used

Article 50. The following supplies of goods or services shall be exempt:
1. where the said goods or services have been used entirely for the performance of exempt supplies and, on these grounds, the right to deduct credit for input tax has not been exercised in respect of the tax charged upon their production, acquisition or importation;
2. where a right to deduct credit for input tax pursuant to Article 70 herein was not in place upon the production, acquisition or importation of the said goods or services.

Chapter Five
TAXATION OF INTRA-COMMUNITY SUPPLIES

Chargeable Event and Chargeability for Intra-European Union Supplies

Article 51. (1) The chargeable event for an intra-European Union supply shall occur on the date on which the chargeable event would have occurred for a supply within the territory of the country.
(2) The chargeable event for an intra-European Union acquisition referred to in Article 7 (4) herein shall occur on the date on which the transport of the goods from the territory of the country starts.
(3) The tax upon an intra-European Union acquisition shall become chargeable on the 15th day of the month following the month during which the chargeable event occurs.
(4) (Supplemented, SG No. 108/2006) Notwithstanding Paragraph (3), the tax shall become chargeable on the date of issue of the invoice respectively the document under Article 168, paragraph 8, where the said invoice is issued before the 15th day of the month following the month during which the chargeable event occurs.
(5) Paragraph (4) shall not apply where the invoice is issued in connection with payment on the supply received before the date of occurrence of the chargeable event.
Taxable Amount of Intra-European Union Supplies

Article 52. (1) The taxable amount for intra-European Union acquisitions shall be determined according to the procedure established by Article 26 herein.
(2) The taxable amount of intra-European Union supplies under Article 7 (4) herein shall be the taxable amount upon acquisition of the goods, the cost price thereof or the taxable amount thereof upon importation, credited according to the procedure established by Article 26 (3) herein.
(3) (Amended, SG No. 95/2009, effective 1.01.2010) The taxable amount referred to in Paragraph (2) shall not be credited with the value of the services covered under Article 21, paragraph 2 herein, whereof the place of transaction is within the territory of the country, for which the person registered under this Act is obliged to charge tax as a payer covered under Article 82 (2) herein.
Rate of Tax and Documenting of Intra-European Union Supplies

Article 53. (1) The intra-European Union supplies referred to in Article 7 herein, with the exception of the exempt intra-European Union supplies referred to in Article 38 (2) herein, shall be liable to tax at the zero rate.
(2) The documents certifying the effecting of the intra-European Union supply shall be specified by the Regulations for Application of this Act.
(3) If the supplier fails to obtain the documents referred to in Paragraph (2) prior to the lapse of the calendar month succeeding the calendar month during which the tax on the supply became chargeable, Paragraph (1) shall not apply. If the supplier obtains the documents referred to in Paragraph (1) subsequently, the supplier shall adjust the result of the application of this Paragraph according to a procedure established by the Regulations for Application of this Act.

PART THREE
TAXATION OF IMPORTS

Chargeable Event for Importation

Article 54. (1) The chargeable event for importation of goods shall occur and the tax shall become chargeable on the date on which the obligation to pay import duty within the territory of the country arises, or should have arisen, including where such an obligation does not exist or the rate of the said obligation is zero.
(2) Where an obligation to pay import duty within the territory of the country does not arise upon importation of goods under Article 16 (3) herein, the chargeable event shall occur and the tax shall become chargeable on the date on which the customs formalities are completed.
Taxable Amount

Article 55. (1) The taxable amount upon importation of goods under Article 16 herein shall be the value for customs purposes credited with:
1. the customs duties, excise duties and other charges due in connection with the importation of the goods within the territory of the European Union, as well as those due by reason of importation into the territory of the country;
2. the expenses incidental to the importation, such as commission, packing, transport and insurance costs, incurred up to the first place of destination of the goods within the territory of the country.
(2) The taxable amount shall furthermore be credited with any costs referred to in Item 2 of Paragraph (1) where the said costs result from transport of the goods from the territory of the country to the territory of another Member State, if the documents accompanying the goods show that the goods are intended for that other Member State.
(3) When goods have been temporarily exported from the territory of the country to a place outside the territory of the European Union for treatment, processing or repair under the outward processing procedure and are re-imported into the territory of the country, the taxable amount shall be the value of the treatment, processing or repair, credited according to the procedure established by Paragraph (1).
(4) The taxable amount under the Paragraphs (1), (2) and (3) shall not include the trade discount or rebate, if allowed to the recipient not later than the date of occurrence of the chargeable event.
(5) Upon importation of goods under Article 16 (3) herein, the taxable amount shall be determined according to the procedure established by Article 26 herein.
Charging of Tax upon Importation by Customs Authorities

Article 56. The tax upon importation under Article 16 herein shall be charged by the customs authorities, with the amount of tax being accounted for according to the procedure established for the customs debt.
Charging of Tax upon Importation by Importer

Article 57. (1) The tax upon importation may be charged by the importer if the said importer is a registered person and is granted authorization to apply this regime in connection with the implementation of an investment project under Article 166 herein.
(2) In the cases under Paragraph (1), the importer shall exercise the right thereof according to the procedure established by Article 164 (2) herein.
(3) The importer shall charge the tax in respect of the import for which the importer has exercised the right thereof under Paragraph (1) by a memorandum on the tax period during which the chargeable event under Article 54 herein occurred.
(4) In the cases referred to in Article 58 (2) herein, the tax shall be charged by the importer by a memorandum on the tax period during which the tax became chargeable.
Exemption from Tax upon Importation

Article 58. (1) Exemption from tax shall be granted in respect of the importation of:
1. (repealed, SG No. 94/2010, effective 1.01.2011);
2. (amended, SG No. 94/2010, effective 1.01.2011) goods which are imported by:
(a) diplomatic missions, consulates or members of their staff, which are compliant with the terms and conditions for exemption from customs duties upon importation;
(b) the European Union, the European Atomic Energy Community, the European Central Bank, the European Investment Bank or by the authorities of the European Union, to which the Protocol of Privileges and Immunities of the European Union applies, subject to the restrictions and terms and conditions of this protocol and the agreements for its application or the agreements on the headquarters, provided that this does not result in violation of the fair competition practices;
(c) international organizations other than those specified in letter “b”, recognized as such by the public authorities of the host member state or effected by members of such organizations, subject to the restrictions and terms and conditions stipulated in the international conventions on the creation of the organizations or in the agreements on their headquarters;
3. human organs, tissues and cells, blood, blood components, milk, dental prostheses;
4. textbooks and teaching aids referred to in Item 3 of Article 41 herein by the organizations covered under Item 1 of Article 41 herein;
5. sea fishing products and other products harvested outside the territorial waters of the European Union by ships, where the said products are imported into ports unprocessed or after undergoing preservation for marketing;
6. (amended, SG No. 94/2010, effective 1.01.2011) goods, when the importation is followed by an intra-Community supply and when the importer submits the following data:
(a) its identification number under Article 94(2);
(b) the VAT identification number of the client for whom the goods are being supplied, issued in another member state, or its own VAT identification number issued in the member state in which the dispatch or transport of the goods ends;
(c) proof that the imported goods are intended to be transported or dispatched to another member state pursuant to a procedure stipulated in the regulations for application of the act;
7. gold by the Bulgarian National Bank;
8. aircraft, vessels, as well as of spare parts for them, with the exception of such for sporting and entertainment purposes;
9. investment gold;
10. (amended, SG No. 94/2010, effective 1.01.2011) gas through a natural gas system or through a network connected to such a system or fed by a vessel transporting gas, in a natural gas system or a network of gas pipelines preceding such a system, of electricity or of heating or cooling energy through district heating or cooling networks;
11. (amended, SG No. 94/2010, effective 1.01.2011) official publications issued under the supervision of the authorities of the state or of the territory of exportation, of international organizations, public structures and public legal formations, established in the state or in the territory of exportation, and printed materials distributed in the context of elections for the European Parliament or in the context of national elections in the country in which the printed materials are being issued by foreign political organizations, officially recognized as such in the member states, to the extent to which these publications and printed materials have been taxed in the state or in the territory of exportation and do not enjoy any exemption from tax upon exportation;
12. (amended, SG No. 106/2008, effective 1.12.2008, amended and supplemented, SG No. 95/2009, effective 1.01.2010, amended, SG No. 94/2010, effective 1.01.2011) pedigree horses of age not exceeding 6 months, which were born in a third country or territory by an animal inseminated in the European Union and subsequently temporarily exported for the birth itself
13. goods which are destroyed or abandoned to the Exchequer according to the procedure established by customs legislation, as well as of goods provided free of charge, which are abandoned and confiscated, with the exception of motor vehicles;
14. goods placed under customs control, which are destroyed or irreversibly lost by reason related to the nature of the goods or through force majeure;
15. (repealed, SG No. 94/2010, effective 1.01.2011);
16. goods which have been temporarily exported for repair or putting in order, if the conditions provided for in customs legislation are fulfilled;
17. (amended, SG No. 94/2010, effective 1.01.2011) goods which are being returned by the exporting person, while preserving the condition in which they had been exported, allowing for the normal wear-and-tear during use, when the said goods are exempt from customs duties;
18. motor vehicles subject to misappropriation or theft and for which the import duties due have been repaid or remitted according to the procedure established by customs legislation.
(2) Where the importer of the goods covered under Item 6 of Paragraph (1) fails to obtain the documents referred to in Article 53 (2) herein prior to the lapse of the month succeeding the month of occurrence of the chargeable event under Article 54 herein, the tax on the importation shall become chargeable by the importer.
(3) The tax referred to in Paragraph (2) shall become chargeable on the last day of the calendar month succeeding the month of occurrence of the chargeable event under Article 54 herein.
(4) (New, SG No. 106/2008, effective 1.12.2008) Importation of goods of a non-commercial nature carried in the personal luggage of travellers shall be exempt from tax based on cash thresholds for road, vessel and aircraft passengers, which shall be set out in the regulations for the application of the Act.
(5) (New, SG No. 106/2008, effective 1.12.2008) The value of the personal luggage of a traveller, which is imported temporarily or re-imported after its temporary export, and the value of the pharmaceutical products required for the personal needs of the traveller shall be exempt from tax without taking into account the thresholds under Paragraph 4.
(6) (New, SG No. 106/2008, effective 1.12.2008) For the purposes of the cash thresholds under Paragraph 4 the value of a single item may not be split up.
(7) (New, SG No. 106/2008, effective 1.12.2008) Exempt from tax shall be the importation of tobacco products, alcohol and alcoholic beverages, as well as the importation of non-frothy wine and beer of a non-commercial nature carried in the personal luggage of passengers within the quantitative thresholds set out in the Regulations for the application of the Act. Such exemption shall not apply to passengers under the age of 17.
(8) (New, SG No. 106/2008, effective 1.12.2008) The fuel per one means of passenger transportation arriving from a third country or territory, contained in a standard tank, as well as no more than 10 litres in a portable container shall be exempt from tax.
(9) (New, SG No. 106/2008, effective 1.12.2008) The values of the goods under Paragraphs 7 and 8 shall not be taken into consideration for determining the cash thresholds under Paragraph 4.
(10) (New, SG No. 106/2008, effective 1.12.2008) Any combination of tobacco products per passenger and any combination of alcohol and alcoholic beverages per passenger may not exceed 100% of the sum total of the percentages formed from the individual allowed quantities.
(11) (New, SG No. 106/2008, effective 1.12.2008) Exempt from tax shall be the importation of goods carried in the personal luggage and the importation of tobacco products, alcohol and alcoholic beverages, as well as the importation of non-frothy wine and beer by the crews of the means of transport used for travel from a third country or territory, based on cash and quantitative thresholds set out in the Regulations for the application of this Act.
(12) (New, SG No. 106/2008, effective 1.12.2008) Cash and quantitative thresholds shall furthermore apply to cases where travel between Member States includes passing transit through the territory of a third country or begins from a third territory. Over-flying without landing shall not be regarded as transit.
(13) (New, SG No. 106/2008, effective 1.12.2008) Paragraph 12 shall not apply where the traveller can produce an evidence that the goods transported in the luggage are charged with tax in the Member State of acquisition and are not subject to value added tax refund.
(14) (New, SG No. 94/2010, effective 1.01.2011) The importation of goods within the permitted duty-free import shall be exempt from tax when:
1. goods of a total value not exceeding BGN 30 are being imported;
2. small consignments are received of goods of non-commercial nature, sent by a third party from one natural person to another natural person within the country, without the latter person having paid for them, of a total value up to but not exceeding the BGN equivalent of EUR 45;
3. personal items received as inheritance are being imported;
4. used personal items of natural persons who relocate their usual place of residence in the European Union are being imported;
5. property in connection with marriage is being imported;
6. used household utensils are being imported after the termination of a temporary stay outside the European Union;
7. orders, medals and honorary awards and prizes are being imported;
8. samples of goods of negligible value are being imported;
9. gifts received within the framework of the international relations are being imported;
10. goods intended for personal use by heads of state are being imported;
11. goods intended for the victims of natural and other calamities are being imported;
12. materials for burial purposes are being imported;
13. materials for protection of goods during transportation and straw for padding, fodder and foodstuffs for animals during their transportation are being imported;
14. documentation is being imported;
15. school aids, educational materials and other household utensils and equipment for pupils and students are being imported;
16. products derived by an agricultural producer from properties situated in third countries located in immediate proximity to the principal place of the economic activity of the producer are being imported;
17. seeds, fertilizers and products for cultivating the soil and crops for a property which is situated in immediate proximity to a third country and which is cultivated by an agricultural producer whose principal place of economic activity is located in the respective third country in immediate proximity to the property, are being imported.
18. video and audio materials of educational, scientific or cultural nature, which are provided by the United Nations Organizations or by some of its specialized agencies, regardless of their intended purpose, are being imported;
19. items from collections and works-of-art of educational, scientific or cultural nature, which are not intended for sale and are imported by museums, galleries or other institutions are being imported; the exemption shall be applied only when the goods are imported for no monetary compensation or, if imported for monetary compensation – if they are not supplied by a taxable person;
20. laboratory animals and biological or chemical substances intended for research are being imported;
21. therapeutic substances of human origin and reagents for determining the blood type and for tissue prostheses are being imported;
22. reference substances for the quality control of medicinal products are being imported;
23. pharmaceutical products used for international sports events are being imported;
24. goods are being imported by state organizations, charitable or philanthropic organizations and the said goods have been received by the said entities free of charge;
25. goods are imported by institutions or organizations and are received free-of-charge for providing aid and assistance to blind people and other handicapped and disabled people;
26. printed advertising materials and articles of advertising nature are being imported;
27. goods are imported to be used or consumed during trade exhibitions or other similar events;
28. goods are imported for the purpose of testing, analysis or research;
29. consignments intended for organizations for protection of copyrights or for protection of the rights of industrial and commercial ownership are being imported;
30. publications containing tourist information are being imported;
31. fuel and lubrication materials, contained in the standard tanks of the terrestrial motor vehicles and in special containers, are being imported;
32. goods are imported by organizations duly authorized for that purpose by the competent authorities for use during construction, maintenance or decoration of cemeteries, graves and monuments of war victims from a third country and buried in the European Union.
(15) (New, SG No. 94/2010, effective 1.01.2011) Tax-exempt shall be the importation from other territories, the imports of which from third countries would have been exempt on the grounds of Article 14.

Provision of Security in Respect of Tax upon Importation

Article 59. (1) Where provision of security in respect of customs duties is not required or is required according to customs legislation, security shall not be provided or shall be provided in respect of the tax in accordance with the amounts specified in customs legislation and according to the procedure established for provision of security in respect of customs duties.
(2) Where an obligation to pay interest on customs duties under a customs debt arises according to customs legislation, an obligation to pay interest on the uncollected tax shall arise as well.
(3) Any person, who has been granted authorization to open and manage a customs warehouse (warehousekeeper) according to the procedure established by customs legislation, shall be solidarily liable with the depositor of the goods in the warehouse for the tax due upon removal of the goods from customs supervision during the storage thereof in the warehouse.
(4) Where exemption from tax is provided for according to the procedure established by Article 173 (1) herein upon importation of motor vehicles and the said vehicles remain under customs supervision, such exemption from tax shall furthermore apply if the motor vehicles, imported by any persons enjoying privileges according to the Vienna Convention on Diplomatic Relations, the Vienna Convention on Consular Relations, consular conventions or other international treaties whereto the Republic of Bulgaria is a party, were subject to misappropriation or theft within the period of customs supervision and this has been established by the competent authorities according to the procedure provided for this.
Payment of Tax upon Importation

Article 60. (1) The tax charged by the customs authorities shall be remitted to Executive Budget Revenue according to the procedure and within the time limits provided for payment of customs duties.
(2) The tax charged by the customs authorities upon importation into the territory of the country may not be set off against other receivables by the revenue or customs authorities.
(3) (New, SG No. 108/2007) In case of import under Article 16 under a regime “temporary importation with partial exemption from import duty” the tax charged by the customs authorities shall be remitted to Executive Budget Revenue before the release of the goods.
Release of Goods

Article 61. The customs authorities shall release the goods after payment of the tax charged or after provision of security in respect of the said tax according to the procedure established for the customs debt, save in the cases where the tax is charged by the importer.

PART FOUR
TAXATION OF INTRA-COMMUNITY ACQUISITION

Place of Supply of Intra-European Union Acquisition

Article 62. (1) The place of supply of an intra-European Union acquisition shall be the territory of the country, where the goods arrive and the transport thereof ends within the territory of the country.
(2) Notwithstanding Paragraph (1), the place of supply of the intra-European Union acquisition shall be the territory of the country, where the person acquiring the goods is registered under this Act and made the acquisition of the said goods under an identification number issued in the country.
(3) Paragraph (2) shall not apply where the person holds proof that an intra-European Union acquisition of the goods has been subject to tax in the Member State where the goods have arrived or the transport thereof has ended.
(4) If the intra-European Union acquisition is subject to tax according to Paragraph (2) and the person subsequently establishes that this intra-European Union acquisition has been subject to tax as well in the Member State where the goods arrive or where the transport thereof ends, the person shall adjust the result of the application of Paragraph (2).
(5) Notwithstanding Paragraph (2), the place of supply of the intra-European Union acquisition shall be the Member State where the goods arrive or where the transport thereof ends, where the following conditions are simultaneously fulfilled:
1. the intermediary in a triangular operation acquires goods under the identification number thereof referred to in Article 94 (2) herein;
2. the person referred to in Item 1 effects a subsequent supply of the goods to the acquirer in the triangular operation;
3. the person referred to in Item 1 issues an invoice on the supply referred to in Item 2, satisfying the requirements of Article 114 herein, stating therein that the said person is an intermediary in a triangular operation and that the acquirer in the triangular operation is the person liable for the tax due on the supply;
4. the person referred to in Item 1 declares the supply referred to in Item 2 in the VIES return for the relevant tax period.
(6) The documents certifying the circumstances covered under Paragraphs (3), (4) and (5), and the procedure for effecting the adjustment under Paragraph (4), shall be specified by the Regulations for Application of this Act.
Chargeable Event and Chargeability of Tax upon Intra-European Union
Acquisition

Article 63. (1) The chargeable event upon an intra-European Union acquisition shall occur on the date on which the chargeable event would have occurred upon a supply within the territory of the country.
(2) The chargeable event upon an intra-European Union acquisition referred to in Article 13 (3) herein shall occur on the date on which the transport of the goods ends within the territory of the country.
(3) The tax upon an intra-European Union acquisition shall become chargeable on the 15th day of the month following the month during which the chargeable event occurs.
(4) Notwithstanding Paragraph (3), the tax shall become chargeable on the date of issue of the invoice, where the said invoice is issued before the 15th day of the month following the month during which the chargeable event occurs.
(5) Paragraph (4) shall not apply, where the invoice is issued in connection with payment effected before the date of occurrence of the chargeable event.
Taxable Amount for Intra-European Union Acquisition

Article 64. (1) The taxable amount for an intra-European Union acquisition shall be determined according to the procedure established by Article 26 herein.
(2) The taxable amount for an intra-European Union acquisition referred to in Article 13 (3) herein shall be equal to the taxable amount formed for the purposes of the intra-European Union acquisition in the Member State from which the goods were dispatched or transported.
(3) The taxable amount for an intra-European Union acquisition of excisable goods shall also include the excise duty due or paid on the goods in the Member State from which the goods were dispatched or transported. If after acquisition the excise duty is refundable to the recipient, the taxable amount shall be debited according to a procedure established by the Regulations for Application of this Act.
(4) (Amended, SG No. 95/2009, effective 1.01.2010) The taxable amount referred to in Paragraphs (1), (2) and (3) shall not include the taxable amount of the services covered under Article 21, paragraph 2 herein whereof the place of transaction is within the territory of the country, in respect of which the person registered under this Act is obliged to charge the tax as a person covered under Article 82 (2) herein.
Exempt Intra-European Union Acquisitions

Article 65. (1) Exemption from tax shall be granted in respect of any intra-European Union acquisitions of goods whereof the place of transaction is within the territory of the country, whose supply within the territory of the country is among those specified in Chapter Four herein.
(2) Exemption from tax shall be granted in respect of any intra-European Union acquisitions, whereof the place of transaction is within the territory of the country, of goods:
1. where any persons covered under Article 172 (2) and Article 174 (1) herein are recipients;
2. (amended, SG No. 94/2010, effective 1.01.2011) the importation of which into the territory of the country would be exempted from tax according to the procedure established by Article 58 herein, with the exception of the importation of goods under Article 58 Paragraph 1, Item 6;
3. (supplemented, SG No. 94/2010, effective 1.01.2011) where the recipients are institutions of the European Union, European Atomic Energy Community, European Central Bank, European Investment Bank or by the authorities of the European Union to which the Protocol of Privileges and Immunities of the European Union is applicable, subject to the restrictions and terms and conditions of this same protocol and the agreements for its application or the agreements on the headquarters and provided that this does not result in violation of the fair competition practices;
4. from an intermediary in a triangular operation, who is a person registered for VAT purposes in another Member State.

PART FIVE
RATES OF TAX AND ASSESSMENT OF TAX LIABILITY

Chapter Six
RATES OF TAX

Rate of Tax

Article 66. (1) The rate of tax shall be 20 per cent applicable to:
1. the taxable supplies, except for those expressly specified as subject to the zero rate;
2. the importation of goods into the territory of the country;
3. the taxable intra-European Union acquisitions.
(2) (Amended, SG No. 94/2010, effective 1.04.2011) The rate of tax applicable to accommodation provided by a hotelier, shall be 9 per cent.
Amount of Tax

Article 67. (1) The amount of tax shall be determined by multiplying the taxable amount by the rate of tax.
(2) Where upon contracting a supply the tax was not expressly stated as due separately, the said tax shall be presumed to be included in the agreed price.
(3) The tax shall furthermore be presumed to be included in the named price where goods subject to a supply are offered in the retail network.

Chapter Seven
CREDIT FOR INPUT TAX

Credit for Input Tax and Right to Deduct Credit for Input Tax

Article 68. (1) “Credit for input tax” shall be the amount of tax which a registered person has the right to deduct from the tax liabilities thereof under this Act in respect of:
1. goods or services received thereby in a taxable supply;
2. a payment effected thereby prior to the occurrence of the chargeable event for a taxable supply;
3. importation effected thereby;
4. the tax chargeable therefrom as a payer under Chapter Eight herein.
(2) The credit for input tax shall become deductible where the tax subject to deduction becomes chargeable.
(3) In the cases of legal succession under Article 10 herein, the credit for input tax shall become deductible:
1. on the date of recording of the circumstance referred to in Article 10 herein in the Commercial Register: where the legal successor is a person registered under this Act;
2. on the date of registration under Article 132 (3) herein.
(4) In the cases referred to in Article 116 (2) herein, credit for input tax shall become deductible on the date of issue of the new tax document.
(5) In the cases referred to in Article 131 herein, credit for input tax shall become deductible on the date of issue of the document referred to in Item 2 of Article 131 (1) herein.
Supplies Conferring Right to Deduct Credit for Input Tax

Article 69. (1) Where the goods and services are used for the purposes of the taxable supplies effected by the registered person, the person shall have the right to deduct credit for:
1. the tax in respect of goods or services which the supplier, who is a person registered under this Act, has supplied or is to supply to the said person;
2. the tax charged upon importation of goods under Articles 56 and 57 herein;
3. the tax chargeable therefrom as a payer under Chapter Eight herein.
(2) For the purposes of Paragraph (1), the following shall furthermore be considered taxable supplies:
1. the supplies within the framework of the economic activity of the registered person, whereof the place of transaction is outside the territory of the country but which would have been taxable if effected within the territory of the country;
2. the supplies of financial services under Article 46 herein and of insurance services under Article 47 herein, where the recipient of the services is established outside the European Union or where the supplies of such services are directly linked with goods for which the conditions of Article 28 herein are fulfilled.
Block on the Right to Deduct Credit for Input Tax

Article 70. (1) The right to deduct credit for input tax shall not be exercisable even though the conditions under Articles 69 or 74 herein are fulfilled, where:
1. the goods or services are intended for effecting of any exempt supplies under Chapter Four herein;
2. the goods or services are intended for supplies effected free of charge or for activities other than the economic activity of the person;
3. the goods or services are intended for business entertainment purposes;
4. a motorcycle or a passenger car has been acquired, imported or rented;
5. the goods or services are linked with the maintenance, repair, improvement or operation of the means of transport referred to in Item 4, as well as for transport services or taxi transport by any means of transport referred to in Item 4;
6. the goods have been confiscated, or the building has been demolished as unlawfully constructed.
(2) Items 4 and 5 of Paragraph (1) shall not apply where:
1. the means of transport referred to in Item 4 of Paragraph (1) are used solely for transport and security services, taxi transport, rental, courier services or motor vehicle driving instruction, including upon their subsequent resale;
2. the means of transport referred to in Item 4 of Paragraph (1) are intended solely for resale (merchandise in stock);
3. the goods or services are intended solely for re-sale (merchandise in stock), including after processing;
4. the goods or services are linked to the maintenance, repair, improvement or operation of the means of transport referred to in Item 1.
(3) Item 2 of Paragraph (1) shall not apply to:
1. (amended and supplemented, SG No. 95/2009, effective 1.01.2010) the special-purpose, working, uniform or presentable clothing and the products for personal protection means provided, free of charge, by an employer to the factory and office workers thereof, including such under management contracts, for the purposes of the economic activity of the said employer;
2. the provision, free of charge, of transport services from the place of residence to the place of work and back, by an employer to the factory and office workers thereof, including such under management contracts, for the purposes of the economic activity of the said employer;
3. the goods or services used in the performance, free of charge, of services by a tenant/user for repair of an asset hired out or allocated for use in the cases where the said asset was hired out or allocated for use to the tenant/user on a continuing basis for a period of not less than three years;
4. the goods or services used in the performance, free of charge, of services by a concessionaire for improvement of an asset allocated for use, where this is a condition and/or obligation under the contract of concession;
5. the provision, free of charge, of goods or services of negligible value for advertising purposes and upon distribution of samples;
6. the food and/or food additives which are provided according to the procedure established by Article 285 of the Labour Code;
7. the transport and overnight stays of persons seconded by the person;
8. the goods or services used in connection with the performance of warranty services under Article 129 herein.
(4) (Supplemented, SG No. 95/2009, effective 1.01.2010) Any person registered in pursuance of Articles 97a and 99 and Article 100 (2) herein shall have no right to credit for input tax.
(5) The right to credit for input tax shall not be exercisable in respect of any mischarged tax.
Conditions for Exercise of Right to Deduct Credit for Input Tax

Article 71. The person shall exercise the right thereof to deduct credit for input tax where one of the following conditions is fulfilled:
1. the said person holds a tax document drawn up in accordance with the requirements of Articles 114 and 115 herein, wherein the tax is indicated on a separate line: in respect of supplies of goods or services for which the person is a recipient;
2. (amended, SG No. 108/2006) has issued a protocol under Article 117 and Article 163b, paragraph 2 and has complied with the requirements of Article 86 – in the cases, when tax is executable by the person as a payer under chapter eight; in the cases under Article 161 or 163a, when the supplier is a tax liable person, the recipient must possess a tax document, drawn up in compliance with the requirements of Articles 114 and 115, where the respective grounds for not calculating tax is specified;
3. (amended, SG No. 94/2010, effective 1.01.2011) the said person holds a customs document for importation wherein the person is specified as importer and the tax has been remitted according to the procedure established by Article 90 (1) herein: in the cases of importation under Article 16 herein;
4. (amended, SG No. 94/2010, effective 1.01.2011) the said person holds a customs document for importation wherein the person is specified as importer, has issued a memorandum under Article 117 herein, and has complied with the requirements of Article 86 herein: in the cases under Article 57 herein;
5. the said person holds a document which satisfies the requirements of Article 114 herein, has issued a memorandum under Article 117 herein, and has complies with the requirements of Article 86 herein: in the cases of an intra-European Union acquisition;
6. the said person holds a document referred to in Item 2 of Article 131 (1) herein;
7. the said person holds the documents specified in the Regulations for Application of this Act: in the cases of legal succession under Article 10 herein.
Period of Exercisability of Right to Deduct Credit for Input Tax

Article 72. (1) (Amended, SG No. 95/2009, effective 1.01.2010) A person registered under this Act may exercise the right thereof to deduct credit for input tax for the tax period during which the said credit becomes deductible or during one of the 12 succeeding tax periods.
(2) The right referred to in Paragraph (1) shall be exercised by the person by means of:
1. including the amount of the credit for input tax upon assessment of the net tax for the tax period under Paragraph (1) in the VAT return under Article 125 for the same tax period;
2. indicating the document under Article 71 herein in the purchase day book under Article 124 herein for the tax period referred to in Item 1.
Right to Deduct Partial Credit for Input Tax

Article 73. (1) A registered person shall have the right to deduct a partial credit for input tax in respect of the tax on goods or services which are used for effecting of both supplies in respect of which credit for input tax is deductible and of supplies or activities in respect of which such a credit is not deductible.
(2) The amount of the partial credit for input tax shall be determined by multiplying the amount of the credit for input tax by a factor rounded up to the second decimal place, made up of a fraction having, as numerator, the turnover attributable to the supplies in respect of which credit for input tax is deductible and, as denominator, the turnover attributable to all supplies and activities effected by the person.
(3) The turnover attributable to supplies in respect of which credit for input tax is deductible shall include:
1. the taxable amounts of the taxable supplies effected by the person;
2. the taxable amounts of the payments received by the person in respect of which the tax became chargeable before occurrence of the chargeable event for a taxable supply;
3. the taxable amounts of the supplies effected by the person whereof the place of transaction is outside the territory of the country, treated as equivalent to taxable supplies according to Article 69 (2) herein, with the exception of the supplies whereof the place of supply is outside the territory of the country, effected from a fixed establishment of the person outside the territory of the country;
4. the taxable amounts of the payments received by the person before effecting of the supplies referred to in Item 3;
5. (amended, SG No. 108/2006) the tax base of the deliveries of goods or services, for which the right of deducting tax credit under Article 70, paragraph 1, sub-paragraphs 3 – 5, has not been exercised.
(4) The turnover attributable to all supplies and activities of the person shall include:
1. the turnover referred to in Paragraph (3);
2. the taxable amounts of the supplies effected by the person whereof the place of transaction is outside the territory of the country, which are not treated as equivalent to taxable supplies within the meaning given by Article 69 (2) herein, with the exception of any supplies effected from a fixed establishment by the person outside the territory of the country;
3. the taxable amounts of the exempt supplies effected, with the exception of any supplies referred to in Item 2 of Article 50 herein;
4. the value of the supplies and the activities outside the framework of the economic activity of the person;
5. the taxable amounts of the payments received by the person before effecting the supplies and the activities referred to in Items 2, 3 and 4 herein;
6. the amount of the subsidies received other than those included in the taxable amount.
(5) The factor shall be calculated on the basis of the turnovers referred to in Paragraphs (3) and (4) for the entire preceding calendar year and, where there are no such turnovers for the preceding calendar year, on the basis of the turnovers referred to in Paragraphs (3) and (4) for the tax period during which credit for input tax becomes deductible.
(6) The right to partial credit for input tax under Paragraph (2) shall be recalculated during the last tax period of the current calendar year on the basis of the parameters covered under Paragraphs (3) and (4) for the current calendar year.
(7) In the cases of deregistration, the amount of the partial credit for input tax under Paragraph (2) shall be recalculated at the end of the last tax period on the basis of the parameters under Paragraphs (3) and (4) in respect of the part of the current calendar year during which the person was not registered.
(8) The difference resulting from the recalculation under Paragraphs (6) and (7) shall be included as an adjustment (upwards or downwards) in the amount of the credit for input tax in the VAT return for the last tax period.
Right to Deduct Credit for Input Tax Where the Tax is Chargeable
on the Recipient/Importer

Article 73a. (New, SG No. 106/2008, effective 1.01.2009) (1) In case of supplies the tax on which is chargeable on the recipient, the right to deduct credit for input tax shall furthermore exist where the supplier of the good has not issued a document required under Article 114, and/or the recipient does not hold a document under Items 2, 4 and 5 of Article 71, and/or the recipient has not complied with the requirements of Article 72, if the supply has not been concealed and data on it is available in the accounts of the recipient.
(2) In the cases under Paragraph (1) the right to deduct credit for input tax shall be exercised during the tax period in which the tax has become chargeable, applying Item 2 of Article 126 (3) mutatis mutandis.
Right to Deduct Credit for Input Tax for Assets Available and Services
Received before Registration Date

Article 74. (1) Any person registered under Articles 96, 97, 98, Article 100 (1) and (3), Articles 102 or 132 herein shall have the right to deduct credit for input tax in respect of any assets, within the meaning given by the Accountancy Act , which were purchased or otherwise acquired or imported prior to the date of registration of the said person under this Act, which are available at the date of registration.
(2) The credit referred to in Paragraph (1) shall become deductible solely in respect of assets available at the date of registration, in respect of which the following conditions are simultaneously fulfilled:
1. the requirements of Articles 69 and 71 herein are satisfied;
2. the supplier was a person registered under this Act at the date of issue of the tax document and the supply was taxable at that date;
3. the registration inventory in standard form of the available assets was drawn up at the date of registration under this Act and was submitted within seven days after the date of registration;
4. the assets were acquired by the person within five years and, applicable to immovable property, within 20 years before the date of registration under this Act.
(3) Any registered person referred to in Paragraph (1) shall furthermore have the right to deduct credit for input tax in respect of any services received before the date of registration of the said person under this Act, where the following conditions are simultaneously fulfilled:
1. the services are directly linked with the registration of the person according to the procedure established by the Commerce Act ;
2. the services were received not earlier than one month before registration of the person under the Commerce Act ;
3. the person has submitted an application for registration under this Act within 30 days after recording of the person in the register referred to in Article 82 of the Tax and Social-Insurance Procedure Code ;
4. the person holds an invoice under Item 1 of Article 71 herein in respect of the services received;
5. the supplier of the services was a person registered under this Act at the date of issue of the tax document and the supply was taxable at the said date;
6. the registration inventory in standard form of the services received was drawn up at the date of registration under this Act and was submitted within seven days after the date of registration.
Accrual and Exercise of Right to Deduct Credit for Input Tax in Respect
of Available Assets and Services Received before Registration

Article 75. (1) Credit for input tax under Article 74 herein shall become deductible on the date of registration under this Act.
(2) The right referred to in Paragraph (1) shall be exercised during the tax period during which the said right accrued or in one of the three succeeding tax periods, with the available assets, the services received and the tax included in the registration inventory under Article 74 herein being recorded in the purchase day book for the relevant tax period.
(3) The right to deduct credit for input tax under Article 74 herein shall not accrue and may not be exercised by the registered person if the registration inventory was submitted later than seven clear days after the date of registration under this Act.
Right to Deduct Credit for Input Tax upon Re-registration

Article 76. (1) Any registered person shall have the right to deduct the tax charged upon deregistration of the said person under this Act in respect of the taxed assets under Item 1 of Article 111 (1) herein, which are available at the date of the subsequent registration of the said person.
(2) The right referred to in Paragraph (1) shall accrue where the following conditions are simultaneously fulfilled:
1. the assets, within the meaning given by the Accountancy Act , available at the date of the subsequent registration under this Act, were taxed upon the deregistration according to the procedure established by Item 1 of Article 111 (1) herein;
2. the tax charged upon the deregistration was remitted effectively or was set off by the revenue authority;
3. the available assets referred to in Item 1 were, are, or will be used by the person for effecting of taxable supplies within the meaning given by Article 69 herein;
4. the registration inventory in standard form of the assets referred to in Item 1 was drawn up at the date of re-registration and was submitted within seven clear days after the date of registration;
5. the assets referred to in Item 1 were acquired by the person within five years and, in respect of immovable property, within 20 years before the date of re-registration under this Act.
(3) (New, SG No. 95/2009, effective 1.01.2010) In the cases under Article 111, paragraph 2, item 5, the registered person shall have the right to deduct the tax credit for the assets purchased or acquired in any other way or deposited within the meaning of the Accountancy Act after the date of de-registration, which are available as at the date of the subsequent registration. The right to tax credit shall occur under the terms and conditions set out in Article 74, paragraph 2.
Accrual and Exercise of Right to Deduct Charged Tax in Connection with
Deregistration under this Act and Subsequent Registration of Person

Article 77. (1) Credit for input tax under Article 76 herein shall become deductible on the date of re-registration under this Act.
(2) The right to deduction under Paragraph (1) shall be exercised during the tax period during which the said right accrued or during one of the three succeeding tax periods, with the available assets and the tax included in the registration inventory under Article 74 herein being recorded in the purchase day book for the relevant tax period.
(3) The right to deduct credit for input tax under Article 76 herein shall not accrue and may not be exercised by the registered person if the registration inventory was submitted later than seven clear days after the date of registration under this Act.
Adjustments of Credit for Input Tax Used upon Change of Taxable Amount
and upon Change of Type of Supply

Article 78. (1) Any registered person shall be obliged to adjust the amount of the credit for input tax used upon any change of the taxable amount of the supply or upon rescission of the supply, as well as upon any change of the type of the supply.
(2) The adjustment shall be effected during the tax period during which the circumstances referred in Paragraph (1) occurred, by means of recording the document referred to in Article 115 or the new document referred to in Article 116 herein, whereby the adjustment was effected, in the purchase day book and in the VAT return for the relevant tax period.
Adjustment of Credit for Input Tax Used in Other Cases

Article 79. (1) Any registered person, who has wholly or partly deducted credit for input tax in respect of any goods or services produced, purchased, acquired or imported thereby and subsequently uses the said goods or services for effecting any exempt supplies or for any supplies or activities in respect of which credit for input tax is not deductible, shall be liable for tax to the amount of the credit for input tax used.
(2) Any registered person, who has wholly deducted credit for input tax in respect of any goods or services produced, purchased, acquired or imported thereby and subsequently uses the said goods or services for effecting of supplies in respect of which credit for input tax is deductible as well as for supplies or activities in respect of which such a credit is not deductible, and where the person cannot determine what portion of the goods or services is used for supplies conferring the right to credit for input tax and such that do not confer the right to credit for input tax, shall be liable for tax according to the procedure established by Paragraph (7).
(3) (Supplemented, SG No. 113/2007) Any registered person, who has wholly or partly deducted credit for input tax in respect of any goods or services produced, purchased, acquired or imported thereby shall charge and be liable for tax to the amount of the credit for input tax deducted upon destruction, ascertainment of shrinkages or upon discarding of goods, as well as upon change of the intended use of the said goods in respect of which credit for input tax is no longer deductible.
(4) The adjustment under Paragraphs (1) and (3) shall be effected in the tax period during which the relevant circumstances have occurred, by means of drawing up a memorandum on the adjustment as effected and recording the said memorandum in the purchase day book and in the VAT return for the said tax period.
(5) The adjustment referred to in Paragraph (2) shall be effected during the last tax period of the year during which the circumstances referred to in Paragraph (2) occur.
(6) Notwithstanding Paragraphs (1) and (3), in respect of any goods and services which are fixed assets within the meaning given by the Corporate Income Tax Act , the person shall be liable for tax to an amount determined according to the following formula:
1. in respect of immovable things:

where:
TD shall be the tax due;
CITU shall be the amount of credit for input tax used;
NoY shall be the clear number of years between the occurrence of the circumstances under Paragraphs (1) or (3), including the year of occurrence of the circumstances, and the lapse of the 20-year period, reckoned from the year of exercise of the right to credit for input tax inclusive;
2. in respect of all other goods or services:

where:
TD shall be the tax due;
CITU shall be the amount of credit for input tax used;
NoY shall be the clear number of years between the occurrence of the circumstances under Paragraphs (1) or (3), including the year of occurrence of the circumstances, and the lapse of the five-year period, reckoned from the year of exercise of the right to credit for input tax inclusive;
(7) In the cases under Paragraph (2), the person shall be liable to tax determined according to the following formula:
1. in respect of immovable things:

where:
TD shall be the tax due;
CITU shall be the amount of credit for input tax used;
NoY shall be the clear number of years between the occurrence of the circumstances under Paragraph (2), including the year of occurrence of the circumstances, and the lapse of the 20-year period, reckoned from the year of exercise of the right to credit for input tax inclusive;
F shall be the factor referred to in Article 73 herein, calculated on the basis of the turnover for the year during which the circumstances under Paragraph (2) occurred;
2. in respect of all other goods or services:

where:
TD shall be the tax due;
CITU shall be the amount of credit for input tax used;
NoY shall be the clear number of years between the occurrence of the circumstances under Paragraph (2), including the year of occurrence of the circumstances, and the lapse of the five-year period, reckoned from the year of exercise of the right to credit for input tax inclusive;
F shall be the factor referred to in Article 73 herein, calculated on the basis of the turnover for the year during which the circumstances under Paragraph (2) occurred.
(8) Any registered person, who has partly deducted credit for input tax in respect of any goods or services produced, purchased, acquired or imported thereby and subsequently uses the said goods or services solely for effecting of taxable supplies under Article 69 herein, shall have the right to adjust (upwards) the amount of the partial credit for input tax upwards according to a procedure and to an amount established in the Regulations for Application of this Act.
(9) Adjustments under Paragraphs (1) to (8) shall be effected on a single occasion.
(10) (New, SG No. 108/2006) A registered person that has entirely or partially deducted tax credit for goods produced, purchased, acquired or imported by it and has later made an intercommunity delivery with these goods shall pay tax to the amount of the tax credit used.
(11) (New, SG No. 108/2006) The adjustment under paragraph 10 shall be made during the tax period, in which the tax for the intercommunity delivery against no consideration has become executable, by drawing up a protocol and its registration in the sales journal for that tax period.
Block on Adjustments

Article 80. (1) (Supplemented, SG No. 108/2007) Adjustments under Article 79, (1) – (7) herein shall not be effected:
1. if the goods or services are used for supplies under Article 70 (3) herein, as well as in the cases under Article 10 herein;
2. if the tax treatment of the supplies for which the registered person uses the goods or services is modified by law;
3. for any goods or services if five years or, applicable to immovable property, -20 years, have elapsed since the commencement of the year during which the right to credit for input tax was exercised.
(2) Adjustments under Article 79 (3) herein shall not be effected in the cases of:
1. (supplemeted, SG No. 108/2006) destruction, shrinkage or discarding caused by force majeure as well as in the cases of destroying excise goods under administrative control in accordance with the procedures of the Excise Duties and Tax Warehouses Act;
2. destruction, shrinkage or discarding caused by accidents or disasters which the person cannot prove that were not caused through the fault of the said person;
3. shrinkages arising from alteration of physical and chemical properties within reasonable limits, conforming to the maximum permissible allowances for natural wastage and shrinkages of goods in the storage and transportation thereof according to the established standards, specifications and other statutory instruments;
4. spoilage within permissible limits, established by the technological documentation as applicable to the production or activity concerned;
5. discarding due to expiry of the service life or shelf life, determined according to the requirements of a statutory instrument;
6. write-off of tangible fixed assets, within the meaning given by the Accountancy Act , where the balance-sheet value of the said assets is less than 10 per cent of the book value thereof.
(3) (New, SG No. 108/2006) In the cases of adjustments under Article 79, paragraph 10 the person shall pay the full amount of the tax credit used regardless of the deadline under paragraph 1, sub-paragraph 3.
Refund of Tax to Persons Not Established within Territory of Country

Article 81. (1) The tax paid shall be refunded to:
1. any taxable persons who are not established within the territory of the country but who are established and registered for VAT purposes within another Member State in respect of any goods purchased and services received thereby within the territory of the country;
2. any persons who are not established within the territory of the European Union but who are registered for VAT purposes in another State: on a basis of reciprocity;
3. any non-taxable natural persons, who are not established within the territory of the European Union, who have effected purchases of goods for private use inclusive of tax charged, after leaving the territory of the country, subject to the condition that the said goods are exported in an unaltered state.
(2) The procedure and the documents required for refund of the tax under Paragraph (1) shall be determined by an ordinance of the Minister of Finance.

Chapter Eight
CHARGING AND REMITTANCE OF TAX

Taxpayer upon Effecting of Taxable Supplies

Article 82. (1) (Amended, SG No. 108/2006) The tax shall be chargeable from a person registered under this Act who is a supplier of a taxable supply, with the exception of the cases covered under Paragraphs (4) and (5).
(2) (Amended, SG No. 108/2006, SG No. 106/2008, effective 1.01.2009, SG No. 95/2009, effective 1.01.2010) Where the supplier is a taxable person who is not established within the territory of the country and the place of supply is the territory of the country and the supply is taxable, the tax shall be chargeable from the recipient of the supply upon:
1. (amended, SG No. 94/2010, effective 1.01.2011) supply of natural gas through a natural gas system situated on the territory of the European Union or through a network connected to such a system, supply of electricity or of heating or cooling energy through district heating or cooling networks, where the recipient is a person registered under this Act;
2. supply of any goods which are assembled or installed by or for the account of the supplier: where the recipient is a person registered under this Act and the supplier is established within the territory of another Member State.
3. supply of services, where the recipient is a taxable person under Article 3, paragraphs 1, 5 and 6.
(3) The tax shall be chargeable from the acquirer in a triangular operation effected under the conditions of Article 15 herein.
(4) The tax shall be chargeable from the recipient who is a person registered under this Act in the cases covered under Article 161 herein.
(5) (New, SG No. 108/2006) The tax is executable by the recipient – the person registered under the present Act, in the cases of Article 163a regardless of whether the supplier is a tax liable person or not.
Taxpayer upon Importation

Article 83. (1) The tax upon importation under Article 16 herein shall be chargeable from the importer.
(2) Where two and/or more persons are solidarily liable for payment of customs duties according to customs legislation, the said persons shall be solidarily liable for payment of the tax due as well.
Taxpayer upon Intra-European Union Acquisitions

Article 84. The tax upon intra-European Union acquisitions shall be chargeable from the person who effects the acquisition.
Taxpayer under Invoices Issued

Article 85. (Amended, SG No. 106/2008, effective 1.01.2009) The tax shall furthermore be chargeable from any person who indicates the tax in an invoice and/or an advice under Article 112 herein.
Registered Person’s Obligation to Charge Tax

Article 86. (1) Any registered person, in respect of whom the tax has become chargeable, shall be obliged to charge the said tax and, to this end, must:
1. issue a tax document and indicate the tax on a separate line therein;
2. include the amount of the tax upon assessment of the net tax for the relevant tax period in the VAT return under Article 125 herein for the said tax period;
3. indicate the document referred to in Item 1 in the purchase day book for the relevant tax period.
(2) The registered person shall be liable for the tax in respect of the tax period during which the tax document was issued, and in the cases where no such document was issued or was issued beyond the time limit under this Act, in respect of the tax period during which the tax became chargeable.
(3) No tax shall be charged in the cases of effecting an exempt supply, an exempt intra-European Union acquisition, as well as in respect of any supply whereof the place of transaction is outside the territory of the country.
(4) Items 1 and 2 of Paragraph (1) and Paragraph (2) shall not apply in the cases under Article 131 (1) herein.
Tax Period

Article 87. (1) “Tax period,” within the meaning given by this Act, shall be the period of time upon the lapse of which a registered person must submit a VAT return showing the net tax for the same tax period.
(2) The tax period shall be fixed as one month in respect of all registered persons and shall be concurrent with the calendar month, except in the cases under Chapter Eighteen herein.
(3) The first tax period after the date of registration shall comprise the clear time between the date of registration and the last day of the calendar month during which the registration under this Act was effected.
(4) The last tax period shall comprise the clear time between the commencement of the tax period and the date of deregistration.
Net Tax for Tax Period

Article 88. (1) The net tax for the tax period shall be the difference between the total amount of the tax chargeable from the person in respect of the said tax period and the total amount of the credit for input tax in respect of which the right to deduction has been exercised during the said tax period.
(2) Where the tax charged exceeds the credit for input tax, the difference shall constitute a net tax for the period: output tax payable.
(3) Where the credit for input tax exceeds the tax charged, the difference shall constitute a net tax for the period: input tax claimable.
(4) The registered person shall self-assess the net tax for each tax period: output tax payable to Executive Budget Revenue or input tax claimable from Executive Budget Expenditures.
Remittance of Tax by Registered Persons

Article 89. (1) Where there is an output tax payable, the registered person shall be obligated to remit the tax to Executive Budget revenue by crediting an account of the competent National Revenue Agency territorial directorate within the time limit for submission of the VAT return for that tax period.
(2) The tax shall be deemed remitted on the date on which the amount was credited to the relevant account referred to in Paragraph (1).
Remittance of Tax upon Importation of Goods

Article 90. (1) In the cases covered under Article 16 herein, the importer of goods shall remit the tax as effectively charged by the customs authorities to Executive Budget revenue as follows:
1. by crediting an account of the relevant customs office releasing for free circulation the goods liable to import duties;
2. by crediting an account or in cash at the cash department of the relevant customs office releasing for free circulation the goods liable to import duties, where the importer is a natural person not registered under this Act who is not a sole trader.
(2) The tax referred to in Paragraph (1) may not be set off against other liabilities by the revenue authorities or the customs authorities.
(3) In the cases under Paragraph (1), the customs authorities shall release the goods upon payment of the tax charged or after provision of security in respect of the said tax according to the procedure established for the customs debt.
(4) (Repealed, SG No. 113/2007).
Remittance of Tax by Person Who Is Not Registered

Article 91. (1) Upon an intra-European Union acquisition of a new means of transport under Article 13 (2) herein by a person who is not registered under this Act, the tax shall be remitted by the said person within 14 days after the lapse of the tax period during which the tax on the acquisition became chargeable.
(2) Upon an intra-European Union acquisition of excisable goods under Item 4 of Article 2 herein, the tax shall be remitted by the person who effected the acquisition within 14 days after the lapse of the month during which the tax became chargeable.
(3) (Amended, SG No. 106/2008, effective 1.01.2009, repealed, SG No. 95/2009, effective 1.01.2010).
(4) (Amended, SG No. 95/2009, effective 1.01.2010) The tax referred to in Paragraphs (1) and (2) shall be remitted to Executive Budget revenue by crediting an account of the National Revenue Agency territorial directorate whereat the person is registered or is subject to registration under the Tax and Social-Insurance Procedure Code.
(5) The tax referred to in Paragraph (4) shall be deemed remitted on the date on which the amount was credited to the relevant account referred to in Paragraph (4).
Set-off, Deduction and Refund of Net Tax for Period: Input Tax Claimable

Article 92. (1) The input tax claimable referred to in Article 88 (3) shall be set off, deducted or refunded as follows:
1. where there are other chargeable and unpaid tax liabilities and liabilities for social-insurance contributions collected by the National Revenue Agency which have accrued prior to the date of submission of the VAT return, the revenue authority shall set off such liabilities against the input tax claimable as stated in the VAT return; the procedure established in Item 2 shall apply to the balance, if any;
2. (amended, SG No. 95/2009, effective 1.01.2010) where there are no other chargeable and unpaid liabilities referred to in Item 1 or where the amount of such liabilities is less than the input tax claimable as stated in the VAT return, the registered person shall deduct the input tax claimable or the balance referred to in Item 1 from the due output tax payable as stated in the VAT returns to be submitted in the next succeeding two tax periods;
3. if after the deduction under Item 2 there remains any output tax payable, it shall be due within the time period established under Article 89 herein;
4. (amended, SG No. 95/2009, effective 1.01.2010, SG No. 94/2010, effective 1.01.2011) if after the lapse of the time limit referred to in Item 2 there is a balance of the input tax claimable, the revenue authority shall set off such balance for redemption of other public receivables due and payable, collected by the National Revenue Agency, or shall refund the said balance within 30 days after submission of the most recent VAT return;
5. (amended, SG No. 95/2009, effective 1.01.2010) if the input tax claimable in respect of which a deduction procedure has commenced has not been fully deducted at the time of submission of a VAT return for the last of the two tax periods, any other input tax claimable under a VAT return for any of the said two tax periods shall be added to it and shall be subject to refund or set-off together with such balance and within the time limit referred to in Item 4;
6. (amended, SG No. 95/2009, effective 1.01.2010) if the conditions under Item 5 are not fulfilled, another two succeeding tax periods for deduction following the period in which such tax was stated shall commence in respect of the input tax claimable as stated next under a VAT return.
(2) (Amended, SG No. 95/2009, effective 1.01.2010, SG No. 94/2010, effective 1.01.2011) The revenue authority shall have no right to set off public receivables that are due and payable, collected by the National Revenue Agency against an input tax claimable as stated in the VAT returns for the two tax periods of the deduction procedure under Paragraph (1).
(3) (Amended, SG No. 108/2007, amended, SG No. 95/2009, effective 1.01.2010) Notwithstanding Paragraph (1), the input tax claimable under Article 88 (3) herein shall be refunded within 30 days after submission of the VAT return, where the person has effected supplies liable to tax at the zero rate during the 12 months last preceding the current month at a total value exceeding 30 per cent of the total value of all taxable supplies. including zero-rate supplies. For the purposes of the first sentence, zero-rate supplies shall be considered equivalent to the supply of the following services with the place of supply within the territory of another Member State on which a recipient is a person registered for VAT purposes in another Member State: intra-European Union transport of goods and related forwarding, courier and postal services other than those under Article 49; transport handling of goods; services related to transport provided by agents, brokers and other intermediaries acting on behalf of and at the sole expense of another person, as well as services of valuation, expertise and handling of movable items.
(4) Notwithstanding Paragraph (1), the input tax claimable under Article 88 (3) herein shall be refunded within 30 days after submission of the VAT return, where the person has been granted permission under Article 166 herein.
(5) (Amended, SG No. 94/2010, effective 1.01.2011) Where, in the cases under Paragraphs (3) and (4), there are public receivables due and payable, collected by the National Revenue Agency which have accrued prior to the date of submission of the VAT return, within the same time limits the revenue authority shall effect a set-off and refund of the balance, if any.
(6) (Amended and supplemented, SG No. 94/2010, effective 1.01.2011) The revenue authority shall effect the set-off under Paragraphs (1) to (2) in the following sequence: value added tax, other taxes collected by the National Revenue Agency, compulsory social-insurance contributions to the public social insurance funds, contributions for supplementary compulsory social insurance contributions, contributions to the National Health Insurance Fund, to the Factory and Office Workers–Ę Guaranteed Claims Fund and other public receivables collected by the National Revenue Agency.
(7) The circumstances covered under Paragraphs (3) and (4) shall be certified in writing to the competent National Revenue Agency territorial directorate according to a procedure established by the Regulations for Application of this Act.
(8) (New, SG No. 108/2007) Notwithstanding Item 4 of Paragraph 1 and Paragraphs 3 – 6, where an audit of the person has commenced, the time period for refund of the tax shall be the time period for issuance of the audit act except for the cases where the person provides security in cash, in government securities or in unconditional and irrevocable bank guarantee which shall be valid for not less than 4 months, and in the cases under Article 114 (3) of the Tax Social-Insurance Procedure Code, not less than 8 months.
(9) (New, SG No. 108/2007, amended, SG No. 94/2010, effective 1.01.2011) The tax shall be refunded and/or set off to the amount of the security under Paragraph (8) within five days after provision thereof.
(10) (Renumbered from paragraph 8, amended SG No. 108/2007, SG No. 95/2009, effective 1.01.2010) Any input tax claimable, which has not been refunded without grounds or which has not been refunded by reason of lapsed grounds (including upon revocation of an act) within the time limits provided for in this Act under paragraph 1, item 4 and paragraphs 3 and 4, shall be refunded together with the legal interest, reckoned from the date on which the said tax should have been refunded under this Act and until the final payment thereof, regardless of the provision of Article 8 and the suspension of the tax proceedings.
Interruption and Resumption of Time Periods under Article 92

Article 93. (1) The time periods for refund under Item 4 of Article 92 (1) and Article 92 (3) and (4) herein shall be interrupted:
1. where no accounts have been kept according to the requirements of the Accountancy Act , and shall resume upon commencement of keeping of such accounts;
2. in the absence or upon failure to present documents that are mandatory under this Act, or of any other documents requested by the revenue authority, if such documents must mandatorily be drawn up according to a statutory instrument, and shall resume upon presentation of the said documents to the revenue authority.
3. upon a failure to grant access to an authorized revenue body to office, production or other premises related to the activity of the registered person, and shall resume upon granting such access;
4. where the person cannot be found according to the procedure established by the Tax and Social-Insurance Procedure Code by the revenue authority at the mailing address named by the said person, and shall resume upon written notification on the part of the registered person to the revenue authority on the change of the address thereof in the country and the finding of the said person at the named addressed by a revenue authority;
5. (repealed, SG No. 108/2007).
(2) The time periods for refund under Item 4 of Article 92 (1) and Article 92 (3) and (4) herein shall be interrupted after consultation with the Executive Director of the National Revenue Agency for a period not exceeding 60 days where:
1. a revenue authority ascertains data of a criminal offence against the tax system and refers the said data to the pre-trial proceeding authorities within one month after ascertainment of the said data;
2. the interruption has been requested in writing by the authorities of the Ministry of Interior or by the judicial authorities upon institution of a pre-trial or judicial proceeding.
(3) In the cases referred to in Paragraph (2), the time periods for refund shall resume upon receipt of a written refusal to institute a proceeding or, respectively, after notification of a completion of the proceeding as instituted

PART SIX
OBLIGATIONS OF PERSONS

Chapter Nine
REGISTRATION

General Dispositions

Article 94. (1) The National Revenue Agency shall establish and maintain a special register under this Act, which shall be part of the register referred to in Article 80 (1) of the Tax and Social-Insurance Procedure Code.
(2) Upon recording in the register, the persons shall be issued with an identification number for VAT purposes, having a prefix “BG”.
(3) Registration under this Act shall be compulsory and optional.
Registration in Connection with Supplies Effected within Territory of
Country

Article 95. (1) The registration requirement under this Act shall apply to each taxable person who is established within the territory of the country and who effects taxable supplies of goods or services covered under Article 12 herein.
(2) The registration requirement under this Act shall furthermore apply to each taxable person who is not established within the territory of the country and who effects taxable supplies of goods or services covered under Article 12 herein other than those for which the tax is chargeable from the recipient.
Compulsory Registration

Article 96. (1) Any taxable person having a taxable turnover of BGN 50,000 or more for a period not exceeding twelve consecutive months last preceding the current month shall be obligated to submit an application for registration under this Act within 14 days after the lapse of the tax period during which such turnover has accrued to the said person.
(2) The taxable turnover shall be the sum of taxable amounts of the following supplies effected by such person:
1. taxable supplies, including supplies liable to tax at the zero rate;
2. supplies of financial services under Article 46 herein;
3. supplies of insurance services under Article 47 herein.
(3) (Amended, SG No. 108/2006) The taxable turnover shall not include any supplies referred to in Items 2 and 3 of Paragraph (2), where not related to the core activity of the person, any supplies of tangible or intangible fixed assets employed in the activity of the person, as well as any supplies for which tax is executable by the recipient under Article 82, paragraphs 2 and 3.
(4) The taxable turnover shall furthermore include any advance payments received for supplies covered under Paragraph (2), with the exception of advance payments received prior to the occurrence of the chargeable event under Article 51 (1) herein.
(5) The obligation to register shall arise notwithstanding the time period over which the taxable turnover has accrued, but not for a period exceeding the period defined in Paragraph (1).
(6) Determination of the taxable turnover shall give consideration to the tax treatment of the supplies applicable at the date of occurrence of the chargeable event or at the date of the payment prior to the occurrence of the chargeable event for the supply.
(7) Paragraph (1) shall not apply to any persons for whom the following conditions are simultaneously fulfilled:
1. they supply services electronically to recipients who are non-taxable persons, who are established or have a permanent address or usually reside within the territory of the country;
2. they are not established within the territory of the European Union;
3. they are registered for VAT purposes for their activity referred to in Item 1 in another Member State.
(8) (Supplemented, SG No. 108/2007, amended, SG No. 95/2009, effective 1.01.2010) Notwithstanding Paragraph (1), a person whose registration has been terminated or refused by the revenue administration in pursuance of Article 176 herein cannot be registered before the grounds for such registration refusal or the grounds for deregistration lapse, or before the lapse of 24 months from the beginning of the month following the month of deregistration or refusal of registration.
Obligation to Register in Case of Supplies of Assembled and Installed
Goods

Article 97. (1) Notwithstanding the taxable turnover under Article 96 herein, the registration requirement under this Act shall apply to each person who is established in another Member State, who is not established within the territory of the country and who effects taxable supplies of goods which are assembled or installed within the territory of the country by or for the account of the said person.
(2) An obligation to submit an application for registration shall arise in respect of the persons referred to in Paragraph (1) not later than seven days prior to the date of occurrence of the chargeable event for the supply referred to in Paragraph (1).
(3) Paragraph (1) shall not apply where the recipient of such supply is a person registered under this Act.
Obligation to Register in Case of Supply of Services the Tax for Which
Is Chargeable on the Recipient

Article 97a. (New, SG No. 95/2009, effective 1.01.2010) (1) Any taxable person under Article 3, paragraphs 1, 5 and 6 receiving services with the place of supply within the territory of the country where such services are taxable and for which the tax is chargeable on the recipient under Article 82, paragraph 2 shall be subject to registration.
(2) Any taxable person under Article 3, paragraphs 1, 5 and 6 established within the territory of the country in which this person provides services under Article 21, paragraph 2 with the place of supply within the territory of another Member State shall be subject to registration.
(3) Any taxable person registered pursuant to the provisions of paragraph 1 shall be considered registered also pursuant under paragraph 2 and vice versa.
(4) The persons under paragraphs 1 and 2 shall lodge a registration application under this Act not later than seven days prior to the date on which the tax on the supply becomes chargeable (advance payment or tax event), whereby the tax base of the received service shall be subject to taxation.
(5) Any person registered pursuant to the provisions of this Article to whom the conditions for compulsory registration under Articles 96, 97, 98 and 99 or for optional registration under Article 100, paragraphs 1, 2 and 3 apply shall register under the terms and conditions set out for either compulsory or optional registration.
Obligation to Register in Case of Distance Selling of Goods

Article 98. (1) The registration requirement under this Act shall apply to each taxable person who effects a supply of goods whereof the place of transaction is within the territory of the country under Article 20 herein under the terms of distance selling referred to in Article 14 herein.
(2) An obligation to submit an application for registration under this Act shall arise in respect of the persons referred to in Paragraph (1) not later than seven days prior to the date of occurrence of the chargeable event for the supply by which the total value of distance selling during the current year exceeds the amount referred to in Item 2 of Article 20 (2). The supply referred to in sentence one shall be liable to tax under this Act.
(3) Where the place of transaction of the supply referred to in Article 20 (4) herein is within the territory of the country, the persons referred to in Paragraph (1) shall submit an application for registration not later than seven days prior to the occurrence of the chargeable event for the supply or prior to the receipt of the advance payment.
Obligation to Register in Case of Intra-European Union Acquisition

Article 99. (1) The registration requirement under this Act shall apply to each non-taxable legal person and taxable person which is not registered in pursuance of Articles 96, 97, 98, Article 100 (1) and (3), and Article 102 herein, and which effects intra-European Union acquisition of goods.
(2) Paragraph (1) shall not apply where the total value of taxable intra-European Union acquisitions for the current calendar year does not exceed BGN 20,000.
(3) An obligation to submit an application for registration under this Act shall arise in respect of the persons referred to in Paragraph (2) not later than seven days prior to the date of occurrence of the chargeable event for the acquisition by which the total value of taxable intra-European Union acquisitions exceeds BGN 20,000 The intra-European Union acquisition by which the said threshold is exceeded shall be liable to tax under this Act.
(4) The value referred to in Paragraph (2) shall be the sum total of taxable intra-European Union acquisitions, with the exception of the acquisition of new means of transport and of excisable goods, net of the value added tax payable or paid in the Member State from which the goods were transported or dispatched.
(5) Paragraph (1) shall not apply in respect of:
1. any persons referred to in Article 168 herein, who acquire new means of transport;
2. any persons referred to in Item 4 of Article 2 herein.
(6) Any person, who is registered in pursuance of this Article and for whom grounds for compulsory registration under Articles 96, 97 and 98 herein or for optional registration under Article 100 (1) and (3) herein arise, shall register according to the procedure and within the time limits applicable to compulsory registration or optional registration.
Optional Registration

Article 100. (1) Any taxable person, whereto the conditions for compulsory registration covered under Article 96 (1) herein do not apply, shall have the right to register under this Act.
(2) Any taxable and non-taxable legal person, whereto the conditions for compulsory registration under Article 99 (1) herein do not apply, shall have the right to register under this Act for intra-European Union acquisition.
(3) Any taxable person may register under this Act, notwithstanding the amount referred to in Item 2 of Article 20 (2) herein, where the said person has notified the tax administration of the Member State where the said person is registered for VAT purposes that the said person wishes the distance selling effected thereby to have a place of transaction within the territory of the country.
(4) (Supplemented, SG No. 108/2007) Notwithstanding Paragraphs (1) and (3), a person whose registration under this Act has been terminated or refused by the revenue administration in pursuance of Article 176 herein cannot be registered before the grounds for refusal of registration or the grounds for deregistration lapse, or before the lapse of 24 months after the beginning of the month following the month of deregistration or refusal of registration.
Registration Procedure

Article 101. (1) For the effecting of registration, the person who is obligated or has the right to register shall submit an application for registration, completed in a standard form, to the competent National Revenue Agency territorial directorate.
(2) Any such application shall be submitted:
1. in person, where the taxable person is a natural person capable of performing juridical acts or a sole trader;
2. by a person vested with representative authority by law, where the taxable person is a legal person or a cooperative;
3. by a person vested with representative authority according to a contract of incorporation, where the taxable person is an unincorporated association or a social insurance fund;
4. by an accredited representative referred to in Article 135 herein;
5. by a person who has been expressly authorized for this act by the persons referred to in Items 1, 2, 3 and 4 by means of a notarized power of attorney.
(3) The application may be submitted electronically according to the procedure established by the Tax and Social-Insurance Procedure Code.
(4) Any application referred to in Paragraph (1) must state the grounds for registration. Documents specified in the Regulations for Application of this Act shall be attached to any such application.
(5) (New, SG No. 95/2009, effective 1.01.2010) In the case of failure of the person to indicate an e-mail address before the Registration Agency, this person shall specify such an address in the application under paragraph 1. Where the e-mail address is changed, the person shall advise the revenue administration thereof within seven days, unless the change has been effected through an application to the Registration Agency.
(6) (Supplemented, SG No. 108/2007, renumbered from Paragraph 5, SG No. 95/2009, effective 1.01.2010) Within seven days after receipt of the application, the revenue authority shall verify the grounds for registration. Where the revenue authority has required the security under Article 176a, the time period for performing the verification shall be 30 days from submitting the application for registration.
(7) (Renumbered from Paragraph 6, SG No. 95/2009, effective 1.01.2010) Within seven days after completion of the verification, the revenue authority shall issue an act whereby it shall effect the registration or shall refuse to effect the registration, stating the reasons for such refusal.
(8) (Renumbered from Paragraph 7, amended, SG No. 95/2009, effective 1.01.2010) Notwithstanding Paragraphs (5) and (6), the registration under Articles 97, 97a, 98 and 99 herein shall be effected by the revenue authority within three days after submission of the application for registration.
Registration Initiated by Revenue Authority

Article 102. (1) Where a revenue authority ascertains that a person has failed to fulfil in due time the obligation thereof to submit an application for registration, the said authority shall register the said person by issuing a registration act, if the conditions for registration are fulfilled.
(2) The act referred to in Paragraph (1) shall state the grounds and the date on which the obligation to register has arisen.
(3) For the purposes of determining the tax liabilities of the person in the cases where the said person was obligated but has failed to submit an application for registration in due time, the person shall be presumed to be liable for tax on the taxable supplies and taxable intra-European Union acquisitions effected thereby:
1. for the period from the expiry of the time limit for submission of an application for registration until the date on which the person was registered by the revenue authority;
2. for the period from the expiry of the time limit for submission of an application for registration until the date on which the grounds for registration have lapsed.
(4) The liabilities referred to in Paragraph (3) shall be determined by an audit act according to the procedure e