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Amendment of reduced 9% VAT rate was published

On 19.06.2020 In the State Gazeta (SG) no. 55, the Law for amendment and supplement of the VAT Act was promulgated, in force from 01.07.2020.

The change is related to the temporary introduction of a reduced tax rate of 9 % for certain goods and services - from July 1, 2020 to December 31, 2021.

Restaurants and catering 

The reduced 9 % VAT rate will apply to restaurant and catering services, which deliver prepared and uncooked food. In the scope of the new regime should fall all category of restaurants including fast food restaurants, coffee shops and bars.
Reduced VAT rate will apply for beverages such as coffee, tea, water, soft drinks, etc. However, it is excluded from the reduced rate the supply of beer, wine and alcohol drinks for which it will continue to apply the rate of 20%. 
Another exception is food delivery for home as this type of service is not equated to restaurant service. For these services will continue to applies the rate of 20%.

Sales of books

Sales of books are also in the scope of reduced VAT rate whether or not they are provided

on physical or electronic media.  Exceptions are advertising materials and video or audio-music content which will continue to apply 20% VAT rate. 20% VAT rate will continue to apply for newspapers and magazines as well as at the moment the changes in the law do not regulate these supplies.

VAT on baby and baby food and diapers

Annex № 4 to the law is drafted in order to specify baby categories and baby food, and diapers (adapted baby milk, porridge, and purees diapers) which will apply  the reduced 9% VAT rate.

This material and information are for general information purposes only. Making any business, legal or other decisions needs additional professional advice. If you have any additional questions, please contact us.

22.06.20


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