31.08.2013

Our aim is to refund VAT without delay and to have no overdue refunds, Deputy Minister of Finance Lyudmila Petkova stated in an interview for Banker newspaper. Firstly, we will endeavour to observe the statutory deadline of 30 days for VAT refund and secondly, next year to make the refund around the middle of that period, the Deputy Minister of Finance responsible for the revenues said. According to Petkova the holding back of VAT refunds deprives the businesses of working capital, the companies are linked and the delay of VAT refund to one company entails non-payment of VAT by another company. The breach of the deadline for VAT refund entails the charging of interest which defrauds the budget, she added.

The European Commission takes account that the reverse charge of VAT mechanism is one of the most effective measures for combatting tax fraud, Petkova said in the interview, and specified that it was an exception of the general VAT regime. Directive 2013/43/EU amending Directive 2006/112/EC (the VAT Directive) provides for the goods and services for which the reverse charge of VAT mechanism can be applied under certain conditions. Where a Member State decides to apply the mechanism for given goods or services, the Member State must inform the EC about the date of commencement and the period to be covered by the measure applying the mechanism, the scope of the measure together with the type and the features of the fraud, and a detailed description of accompanying measures to be implemented to avoid fraudulent activities in relation to other goods and services.

Lyudmila Petkova also commented the legislative changes proposed to the Tax and Social Insurance Procedure Code (TSIPC) related to the single account. The proposed amendments aim to support obligated persons experiencing temporary financial difficulties by changing the sequence of liabilities payment -the principal of taxes and social security contributions to be paid first and then the interest. Thus the accrual of interest is stopped and the accumulation of new liabilities is prevented. At the moment a notification by SMS service is being developed whereby the NRA will notify the persons who have paid a liability that a payment has been made to the budget. The new e-service will be applied as from 1 September 2013.

Amendments to the TSIPC are being drafted whereby to regulate the overall fiscal control regime for high fiscal risk goods with the exception of goods under customs regime, the Deputy Minister of Finance announced. The Bill includes proposals for the new powers of the fiscal control bodies and for the manner of exercising fiscal control. The plan is the mobile groups and regional teams of the new NRA Fiscal Control Directorate to exercise control throughout the territory of the country as from 1 January 2014.