Bulgaria's Govt Lied about EC Sanctions over Flat VAT in Tourism

The European Commission has not threatened with sanctions Bulgaria's government unless it introduces a flat 9% value-added tax (VAT) in the tourism sector next year, an MEP from the opposition Socialist party claims.

Bulgaria will introduce a flat 9% value-added tax (VAT) in the tourism sector as of the beginning of April next year under amendments that parliament adopted at second reading in the middle of November.

The ruling centre-right government of GERB party claimed the introduction of a flat VAT for the tourism sector comes in response to the demand of the European Union that Bulgaria should harmonize tourism VAT, which currently stands at 7% for organized groups and 20% for individual tourism.

It said Bulgaria approached the European Commission (EC) with an inquiry on the possibility to introduce a unified value-added tax (VAT) in the tourism sector from 2012, as proposed by the industry, but the proposal was rejected.

"
There is nothing that makes the change in the VAT rate for the tourism sector that urgent,"
Socialist MEP Kristian Vigenin said, citing a statement of Algirdas Semeta, EU Commissioner for Taxation and Customs Union, Audit and Anti-Fraud.

In response to a question by Kristian Vigenin, Commissioner Semeta confirmed that the European Commission contacted the Bulgarian authorities over the issue in question, but did not mention the country has been threatened by sanctions.

The idea for a flat tourism VAT tax has sparked an outcry from tour operators and hoteliers, who called it "
ridiculous"
since all contract deals with foreign tour operators for the clients' vacations in Bulgaria in 2011 have already been signed and called for postponing the new tax until 2012.

The government has defended its decision by saying this is not a fiscal measure, but a bid to avoid a sanction by Brussels for not putting on a par the two types of tourism - individual tourism and tourism for organized groups.

Tourism is one of, if not the most important industry for the perennially cash-strapped Bulgaria - it not only provides nearly 10% of the country's GDP, but is also a significant source of foreign currency and jobs. The industry has also been traditionally the favourite sector of those in power - it is the only one that enjoys a reduced value-added-tax.

Following its EU accession, Bulgaria was expected to capitalize on its tourism industry potential and benefit from the increased exposure and easier accessibility to its markets, but critics say it never made it to the breaking out of the champagne.

The economic growth that Bulgaria saw over the last few years was built upon the growth in construction, real estate and tourism sectors. The industry says the government should focus its efforts on the tourism sector and introduce a package of anti-crisis measures, now that the construction and real estate sectors are facing a collapse.

Admin wrote:

Bulgaria's Govt Lied

Isn't that all they ever do?

No change here then maybe this is a Baltic thing and lies are all they are taught in Government ? having said that its the same even in the UK, US and so on and on and on and on and on

Here we have Brussels bossing other people about again, I thought EU countries set their own VAT, the UK has had lots of different VAT rates, the VAT there goes up and down like a yo-yo.

Bulgaria Rulers, Opposition Clash over Flat VAT in Tourism

Bulgaria's ruling party has opposed proposals for a delay in the introduction of a flat 9% value-added tax (VAT) in the tourism sector, scheduled for April 1 next year.

"
I don't see why we should delay this move. If we do this in a bid to boost the summer season, tour operators may press the same demands for the winter season as well,"
commented Menda Stoyanova, head of the budget parliamentary commission.

The statement came in response to a proposal for the introduction of the flat rate after the summer season, tabled to parliament by the right-wing Blue Coalition.

Earlier this month the opposition Socialist Party claimed the European Commission has not threatened with sanctions Bulgaria's government unless it introduces a flat 9% value-added tax (VAT) in the tourism sector next year.

"
There is nothing that makes the change in the VAT rate for the tourism sector that urgent,"
Socialist MEP Kristian Vigenin said, citing a statement of Algirdas Semeta, EU Commissioner for Taxation and Customs Union, Audit and Anti-Fraud.

In response to a question by Kristian Vigenin, Commissioner Semeta confirmed that the European Commission contacted the Bulgarian authorities over the issue in question, but did not mention the country has been threatened by sanctions.

Bulgaria will introduce a flat 9% value-added tax (VAT) in the tourism sector as of the beginning of April next year under amendments that parliament adopted at second reading in the middle of November.

The ruling centre-right government of GERB party claimed the introduction of a flat VAT for the tourism sector comes in response to the demand of the European Union that Bulgaria should harmonize tourism VAT, which currently stands at 7% for organized groups and 20% for individual tourism.

It said Bulgaria approached the European Commission (EC) with an inquiry on the possibility to introduce a unified value-added tax (VAT) in the tourism sector from 2012, as proposed by the industry, but the proposal was rejected.

The idea for a flat tourism VAT tax has sparked an outcry from tour operators and hoteliers, who called it "
ridiculous"
since all contract deals with foreign tour operators for the clients' vacations in Bulgaria in 2011 have already been signed and called for postponing the new tax until 2012.

The government has defended its decision by saying this is not a fiscal measure, but a bid to avoid a sanction by Brussels for not putting on a par the two types of tourism - individual tourism and tourism for organized groups.

Tourism is one of, if not the most important industry for the perennially cash-strapped Bulgaria - it not only provides nearly 10% of the country's GDP, but is also a significant source of foreign currency and jobs. The industry has also been traditionally the favourite sector of those in power - it is the only one that enjoys a reduced value-added-tax.

[size=55:3j7t2r8d]novinite

Bulgaria Introduces Flat 9% VAT in Tourism April 2011

The ruling majority in Bulgaria's parliament has voted down a proposal for a delay in the introduction of a flat 9% value-added tax (VAT) in the tourism sector.

Bulgaria will introduce a flat 9% value-added tax (VAT) in the tourism sector as of the beginning of April this year under amendments that parliament adopted conclusively on Wednesday.

The right-wing Blue Coalition had insisted that the flat rate is introduced as of October after the summer season, saying that in times of crisis the sectors are very sensitive to tax hikes.

“The increase in the VAT tax for the tourism sector will rake in additional revenues just enough to fund two or three governmental visits abroad,” the leader of the coalition Martin Dimitrov said from the parliamentary rostrum.

He argued that the European Commission has not threatened with sanctions Bulgaria's government unless it introduces a flat 9% value-added tax (VAT) in the tourism sector next year.

"
There is nothing that makes the change in the VAT rate for the tourism sector that urgent, there is no deadline that the European Commission has set,"
he said.

The ruling centre-right government of GERB party claims the introduction of a flat VAT for the tourism sector comes in response to the demand of the European Union that Bulgaria should harmonize tourism VAT, which currently stands at 7% for organized groups and 20% for individual tourism.

It said Bulgaria approached the European Commission (EC) with an inquiry on the possibility to introduce a unified value-added tax (VAT) in the tourism sector from 2012, as proposed by the industry, but the proposal was rejected.

The idea for a flat tourism VAT tax has sparked an outcry from tour operators and hoteliers, who called it "
ridiculous"
since all contract deals with foreign tour operators for the clients' vacations in Bulgaria in 2011 have already been signed and called for postponing the new tax until 2012.

The government has defended its decision by saying this is not a fiscal measure, but a bid to avoid a sanction by Brussels for not putting on a par the two types of tourism - individual tourism and tourism for organized groups.

Tourism is one of, if not the most important industry for the perennially cash-strapped Bulgaria - it not only provides nearly 10% of the country's GDP, but is also a significant source of foreign currency and jobs. The industry has also been traditionally the favourite sector of those in power - it is the only one that enjoys a reduced value-added-tax.

[size=55:3k9c3h38]novinite

Bulgarian MPs Pass Tax Amendments at 1st Reading

Bulgarian Members of the Parliament passed at first reading Tuesday several important amendments in a number of tax bills.

The amendments involve the Individual Tax, Value Added Tax (VAT) and the Excise and Tax Warehouses Acts.

With them, individuals, who receive income only through a labor contact and/or have lost their job during the tax year, are no longer required to submit an annual tax declaration. Until now only people, whose employer had recalculated their tax, had this right.

The mechanism for determining the amount of annual taxes is alleviated by the rule to round the amount to the nearest BGN in favor of the taxpayers in order to reduce administrative and taxpayers' expenses when small amounts are involved.

The amendments introduce mandatory declaring of income from management of financial tools, which are non-taxable, in annual amount over BGN 5 000, with the aim to limit violations in deals involving such tools like concealing taxes or using them as proof of property assets.

The MPs also decided to increase the excise duty on diesel and kerosene and to introduce positive excise rate on natural gas used as motor fuel or for heating.

The excise on beer imported from small independent breweries, registered in another EU Member State, was reduced;
owners or renters of small facilities for distilling the traditional Bulgarian brandy – rakiya, can now be registered under the Trade Act, or under legislation of another EU country/

In tourism, the reduced to 9% VAT will be now used not only by hotels, but in mountain cabins, and guest houses. According to experts from the National Revenue Agency (NRA), this will not change prices and the business of the facilities since most guests houses are not registered under VAT. The amendment, however, would harmonize Bulgaria's legislation with the EU one, where the preferential tax rate must be applied to the service labeled "
accommodation,"
regardless of the type of facility.

According to the amendments, individuals practicing independent economic activity can remain registered under VAT for the entire period of this activity until the deletion of their trade registration, without going through a de-registration procedure.

Those registered under VAT will be mandated to submit declarations online, in exception of those with very small turnover, who will be able to submit up to five paper declarations.