2022. február 17.

Extension of the reduced VAT rate on certain supplies in Bulgaria

The provisions aim to support businesses in the ongoing Covid pandemic


With an eleventh-hour decision of 23 December 2021 the Bulgarian Parliament extended the term of the reduced VAT rate on certain supplies of goods and services until the end of 2022. The amendments to the Value Added Tax Act were published in the Bulgarian State Gazette No. 111 on 31 December 2021.

The tax relief was originally introduced in July 2020 as a temporary measure to help the most affected businesses from the Covid pandemic situation recover and was initially meant to apply until 31 December 2021.

Extended period of application of the reduced VAT rate

The extended period of application of the reduced 9% VAT rate on the supplies listed below starts on 1 January 2022 and shall be in force until 31 December 2022.

Supplies subject to the reduced 9% VAT rate

The reduced 9% VAT rate shall continue to apply to the following supplies:

  • Restaurants and catering services
    Restaurants and catering services consist of the supply of prepared or unprepared food, including take-away and delivery of food. The reduced rate does not apply to services consisting of the supply of alcoholic spirits. Takeaway food from supermarkets and the like are excluded from the reduced rate.
  • Books
    The reduced VAT rate applies to books on a physical medium or by electronic means or both, including textbooks, learning books and learning sets, children’s picture, drawing or colouring books and music printed or in manuscript form.Outside the scope of the tax relief remain:
    – newspapers and periodicals;
    – publications wholly or predominantly devoted to advertising;
    – publications wholly or predominantly consisting of video content or audible music.
  • Baby food and diapers
    The baby foodstuffs falling within the scope of the reduced VAT rate include adapted milk formula, baby porridges and cereals, vegetable, fruit and/or meat purees in jars not exceeding 250g. Baby diapers are also subject to the reduced 9% VAT rate.
  • Supplies under the special travel-agent VAT scheme
    The reduced VAT rate also applies to supplies falling within the scope of the special travel-agent VAT scheme, as well as to the excursions organised by tour operators and travel agents with occasional passenger transport by bus.
  • Supply of services for the use of sports facilities
    The use of various sports facilities is also taxable under the reduced 9% VAT rate.

If you would like to know more about the latest tax regulations in Bulgaria, please visit the homepage of Delchev & Partners Law Firm, the exclusive representative of WTS Global in Bulgaria.

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