European Commission requests Bulgaria to amend its VAT rules

European Commission requests Bulgaria to amend its VAT rules

The European Commission has officially requested Bulgaria to amend its legislation on value added tax (VAT), the Commission said on October 27 2011.The rules in Bulgaria on the conditions for refunding VAT to taxable persons subject to a tax audit discriminate against persons involved in intra-Community transactions."The Commission considers that these rules, which distinguish between taxable persons operating only within Bulgaria and those carrying out transactions with other EU Member States, are incompatible with the VAT Directive and with the principle of proportionality," the statement said.The request takes the form of a Reasoned Opinion (the second stage of an infringement procedure).If the rules are not brought into compliance within two months, the Commission may refer the matter to the European Court of Justice.Under Bulgarian legislation, taxable persons who undergo a tax audit are refunded VAT at the end of the audit procedure.Bulgarian legislation, however, lays down specific time periods for audits of taxable persons involved in intra-Community transactions.These time limits are twice as long as those applicable to traders only involved in domestic transactions.Therefore, taxable persons carrying out intra-Community transactions who wish to obtain the refund before the end of the tax audit must lodge a security or a bank guarantee for twice as long a period. (Source: The Sofia Echo)

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