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EC Pursues Infringement against Bulgaria on VAT Rules
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The European Commission has issued an official request to Bulgaria to change its VAT legislation in order to ensure equality among entities working within the country and in the EU.
Bulgaria has two months to bring laws in line with European Union legislation, after which the Commission will bring the matter to the European Court of Justice.
According to the EC, 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.
Bulgarian legislation distinguishes between taxable persons operating only within Bulgaria and those carrying out transactions with other EU Member States, which is incompatible with the EU VAT Directive and with the principle of proportionality.
Under Bulgarian legislation, taxable persons who undergo a tax audit are refunded VAT at the end of the audit procedure. However, the time limits for audits are twice longer for entities involved in transactions within the EU, than those for entities working solely in Bulgaria.
By issuing the Reasoned Opinion on the matter Thursday, the European Commission has completed the last step in the infringement procedure before referring Bulgaria to the ECJ.
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