Nina Boteva Law Office Newsletter

At the end of 2020, the Bulgarian Parliament adopted significant changes to the Value Added Tax Act (VATA). The changes are related to the introduction of the requirements of Council Directive (EU) 2017/2455 of 5 December 2017 amending Directive 2006/112/EC and Directive 2009/132/EC as regards certain value-added tax obligations for supplies of services and distance sales of goods and Council Directive (EU) 2019/1995 of 21 November 2019 amending Directive 2006/112/EC as regards provisions relating to distance sales of goods and certain domestic supplies of goods.

The legislative changes concern cross-border e-commerce between taxable and non-taxable persons, so the adopted amendments to the VATA are related to:

• Intra-Community distance sales of goods

In this type of sale, the goods are dispatched or transported from the territory of a Member State other than that in which the dispatch or transport of the goods ends to a non-taxable person, which also includes a taxable person and a non-taxable legal entity who carries out exempted intra-Community acquisitions. The goods must have been produced in the territory of the European Union (EU) or released for free circulation.

• Distance sales of goods imported from third countries or territories

In this type of sale, the goods are sent or transported from third countries or territories to an EU Member State. The consignee of the goods is again a non-taxable person or a taxable person and a non-taxable legal person who makes exempt intra-Community acquisitions. In such cases, the goods must be located in the territory of third countries at the time of sale.

• Internal distance selling

In this type of sale, a taxable person not established in the territory of the EU begins and completes the dispatch and transport of the goods within the territory of the same country.

• Deliveries facilitated by a person operating an electronic interface

This type of supply is regulated in an entirely new provision of the VATA. An electronic interface is a device or program that allows communication between two independent systems, or a system and an end recipient, and may include a website, portal, platform, application interface, and other similar means.

A taxable person operating an electronic interface is considered to facilitate the delivery of goods when the use of the electronic interface allows a consignee and a supplier offering goods for sale to make contact which leads to the delivery of goods through that electronic interface. The taxable person operating an electronic interface is a person other than the supplier offering the goods for sale and the consignee.