17.09.2013

"We are expecting by the end of the month a letter by the European Commission on the request of the Ministry of Finance of 8 August 2013 for maintaining the reduced excise duty rate of BGN 0.85 per gigajoule (GJ) on natural gas used as fuel, so as not to apply the minimum for EU rate under the natural gas directive as from 1 January 2014", Deputy Minister of Finance Lyudmila Petkova said during her presentation of the draft laws to amend the Excise Duties and Tax Warehouses Law (EDTWL) and the VAT Law (VATL). The request is well reasoned and the MoF hopes to receive a positive response for a six year period - from 01.01.2014 till 31.12.2019. There are several EU Member States applying such a reduced excise duty rate among which Italy, Portugal and Belgium.

Lyudmila Petkova clarified also in detail the State aid scheme "Reduced excise duty rate on diesel, used in primary agricultural production" that will be applied to agricultural producers through vouchers for fuel to the amount of BGN 70 million in 2014. EC approved the scheme in December 2011 but it had not been applied yet. Our country has applied for extension of the scheme until 31.12.2014. According to the Ministry of Agriculture and Food 75,000 agricultural producers will avail of the measure. Deputy Minister Petkova explained in detail the mechanism for applying the scheme: which agricultural producers could benefit from it, how the vouchers would be distributed and how the actual use of fuel subject to the State aid scheme would be accounted for.

The amendments to the EDTWL also foresee proposals for reducing the administrative burden on the businesses. It is proposed small wine producers, when they send excise goods to an authorised warehouse keeper on the territory of the country, to also apply excise duty suspension arrangement and the goods not to be accompanied by an electronic administrative document. It is proposed the security under excise duty suspension arrangement payment regime to be provided under the provisions of the Tax and Social Insurance Procedure Code and not under the customs legislation. Thus an end will be put to the existing practice of oversecuritisation of excise liabilities that results in considerable costs for the businesses.

In respect of the proposed amendments to the VATL Deputy Minister Petkova specified that they were made in order to introduce the special cash accounting scheme for VAT that will help small and medium sized enterprises that encounter difficulties to pay the VAT to the budget before they have received payment from their customers. For the companies that will apply the special cash accounting scheme for VAT the tax on supplies within the scope of the scheme becomes payable on the date of receipt of payment of the supply (in full or in part). The MoF envisages 220,000 companies to avail of the scheme. The other amendments to the VATL are related to bringing the national legislation in line with the EU law, namely Directive 2006/112/EC and the Court case law, as well as the application of a derogation from Directive 2006/112/EC pertaining to the relations between Bulgaria and Romania in their joint work on Danube Bridge II.