Value-added tax

Consumers across Bulgaria are noticing a rise in bread prices, with reports from various cities highlighting increases in recent days. Traders explain that the return of the 20 percent VAT rate, which had previously been reduced to zero, is one of the main factors contributing to the price hike.

Starting January 1, the VAT rate for restaurant services in Bulgaria will return to 20%, marking the end of the temporary 9% rate introduced during the Covid crisis. The reduced VAT was extended several times but will no longer apply, also affecting the zero VAT rate on bread and flour, which will revert to 20%.

The Independent Authority for Public Revenue (AADE) has informed taxpayers about the operation of its digital applications on Tuesday, December 31, the last day of 2024.

Specifically, the digital applications and processes of the Independent Authority for Public Revenue will operate as follows:

The good course of the economy and increased revenues are also reflected in the data of the tax administration, according to which eight out of 10 euros are paid on time by taxpayers and businesses.

The taxes that individuals and businesses must pay during December amount to 5.5 billion euros.

The payment of income tax, Single Property Tax (ENFIA), value-added tax (VAT) and road tax are the most important obligations that taxpayers must cover by December 31.

Greece applies one of the highest value-added tax rates internationally, but few people end up paying it. The 24% VAT rate, which is among the seven highest in Europe, only affects 38% of consumption, while only four out of 100 are taxed at the highest rate of the personal income tax scale.

In its report for Greece, the OECD recommends reductions in the use of low rates and exemptions currently in force for VAT, in tax exemptions and in the tax-free threshold applied to income. It also proposes increasing taxes on products such as tobacco, and imposing a special consumption tax on fat and salt.

As the political debate on VAT reductions in the country is “ignited”, the OECD published its annual report on Greece on Thursday and recommends that the government limit or abolish low VAT rates, remove tax exemptions for pensioners, and increase taxes on “unhealthy” habits and products such as tobacco or anything containing sugar, salt, etc.

Bulgaria's Acting Finance Minister Lyudmila Petkova stated that discussions are ongoing regarding the payment of a 100 leva (50 euros) Christmas supplement to pensioners. The proposal targets individuals with a basic pension of up to 526 leva, equivalent to the poverty line, and excludes those with additional income sources.

“End of an era” for the stamp duty on commercial leases, which was replaced from 1 December 2024 by the Digital Transaction Fee (DTC).