Postponed accounting of import VAT introduced in Bulgaria
Bulgaria now allows the reverse charge on imports on an additional list of products.
Postponed accounting of import VAT allows businesses to pay and deduct import VAT at the same time as part of the periodic VAT return submission. Those companies who benefit from this regime effectively avoid the payment of import VAT at customs, with the corresponding nil cash flow effect.
As from July 2019, Bulgaria allows postponed accounting of import VAT on additional products such as aluminium, nickel, sulphur, tin, lead, zinc and organic chemical products. The conditions to benefit from this regime are the following: a) the business importing the goods cannot have any outstanding tax liability with the Bulgarian tax authorities; b) it must have been registered for at least 6 months before the import takes place; and c) the value of the product imported (commodity code in the SAD) must exceed BGN 50,000 .
Most EU countries have some form of simplification to compensate the cash-flow impact of paying VAT at customs when the goods enter the EU territory. The most common simplifications are postponed import VAT accounting and import VAT deferral. Whereas postponed import VAT consists on the reverse charge of import VAT in the VAT return, import VAT deferral consists on the delay of the obligation to pay VAT. So instead of having to pay VAT when the goods enter the EU, you would be required to pay it, for example, 45 days after that date.