Whilst browsing information about VAT applied by different EU member states on different materials, I came across the list for BG which indicates that VAT is payable at the reduced rate of 6% on renovation and construction work undertaken on properties that are older than 5 years. This info was dated Jan 2013. VAT being something I haven't had to deal with in many years, I am wondering whether this info reflects the reality or is it more normal to get the standard VAT slapped on...and is 21% REALLY the standard VAT rate in BG?

Can I safely presume then that in light of lack of comment (and despite complaints about how corruption is rife in BG) that everyone pays 'black money' for renovations and VAT for such work isn't an issue?

My understanding is that when you purchase materials from a supplier, it is his responsibility to handle the VAT component and pay it on to the relevent department. If you pay someone for work done on a casual basis, it is their decision to declare it as income for taxation/VAT purposes..if, on the other hand, you employ a person on a full time salary (like I do), then you have an obligation to make the necessary deductions, keep accurate records and forward the correct amounts to each department on a regular basis.

Hope this helps you.

So if you hire a builder (who theoretically should be operating as a business) their fee for their services will or will not show a VAT component on top? I realise that purchasing materials includes the VAT, but are you saying that, for example, all the builders you see recommended on forums such as this will not be declaring their income/working 'cash in hand' and hence will not apply VAT?

I can't comment on any of the builders because I've never used them, BUT if they are a registered, legit business, they should show a Vat component on their quotation or on an invoice when you pay them.

We all know that many folk work 'cash in hand' and for small jobs, on an irregular basis, that's no big thing, but on larger projects where the builder is
likely to be claiming the materials cost against the total income from the job, he would be crazy not to include a VAT component..one audit is all it takes!

Thank you for that. And would you be able to confirm that this would be the reduced rate 6% (on the labour - not the materials). I want to make sure I know what should be expected. Paying VAT for labour/services would give me more a tad more confidence if the need for recourse arose.

Sorry..as I said, I've not used any builders over here because I do all my own construction work, so can't comment on VAT rates. One thing that most of us over here would agree on is regarding the 'recourse' issue you mentioned...it is extremely difficult...some would say nigh on impossible..to proceed with any action against a defaulter. Lawyers may 'talk the talk' and demand a hefty fee upfront, but sometime down the track will wring their hands and tell you nothing can be done! Usually involves lots of 'palm greasing' and rarely involves success. In certain parts of this country a baseball bat on a dark night will bring satisfaction when all else fails.