Bulgarian Government Proposes VAT Bad Debt Relief

Bulgarian Government proposes VAT bad debt relief

• A draft bill for amendments to the Bulgarian Value Added Tax (VAT) Act has been circulated for public consultation. One of the key proposed changes introduces VAT recovery on unpaid receivables.
• In particular, according to the proposal, the VAT position of the supplier should be adjusted through the issuance of a credit note. Тhe published texts, if enacted, would govern the requirements and conditions for the application оf the bad debt relief.

Background

The proposed introduction of bad debt relief in the Bulgarian legislation is a natural continuation of the administrative and court practice evolving on the topic over the past two years.