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Varadinov & Co.
Legal Bulletin

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Law on Value Added Tax
A new regime for the security for deliveries of liquid fuels is introduced with the latest amendments in the Law on Value Added Tax (SG 60/02.08.2016). Every taxpayer will be obligated to provide collateral in cash, government bonds or in an unconditional and irrevocable bank guarantee for a term of one year in front of the competent territorial directorate of the National Revenue Agency when for the current tax period the taxpayer executes taxable deliveries of liquid fuels with tax rate 20 percent and with total value of the tax bases over 25 000 leva; or the total value of the tax bases in intra-communal acquisitions of liquid fuels, which are not intended for consumption by the person that has executed the intra-communal acquisitions, exceeds 25 000 leva; or receives liquid fuels, released for consumption under Art. 20, par. 2, p.1 of the Law on Excise and Tax Warehouses, with value over 25 000 leva if another basis for collateral on other grounds has not arisen.
The collateral is in an amount not less than 20 percent of the tax base of the taxable deliveries, acquisitions or the value of the received liquid fuels, released for consumption for the previous tax period but no less than 50 000 leva. Upon subsequent deliveries, with place of execution on the territory of the country, of liquid fuels, which were subject of intra-communal acquisition or were secured upon their release for consumption, collateral is not provided from the person that has executed the intra-communal acquisition or received the liquid fuels, released for consumption. When the taxpayer has not been executing taxable deliveries or intra-communal acquisitions or has not been receiving released for consumption liquid fuels under the Law on Excise and Tax Warehouses with total value of the deliveries, acquisitions or releases over 25 000 leva for the previous tax period, the amount of the collateral is defined over the estimated monthly tax base of the taxable deliveries or acquisitions of liquid fuels or the value if the released for consumption liquid fuels, calculated on a 12-month basis, but no less than 50 000 leva. Upon a change of circumstances, which are of importance for defining the value of the collateral, new collateral is provided seven days before the change.
The collateral is provided in 7 days before the date on which the taxable event of the delivery has arisen which tax base exceeds 25 000 leva; or rise of a taxable event in intra-communal acquisition which tax base exceeds 25 000 leva; or a release of liquid fuels for consumption under the Law on Excise and Tax Warehouses which tax base exceeds 25 000 leva. Upon existence of the conditions for this, the taxpayer is obligated to provide a new collateral no later than 14 days before the expiration of the previous one. The collateral is released and the person is deleted from the, introduced with the amendments, electronic public register of collaterals to the National Revenue Agency. A competent revenue body may suspend the registration and delete from the register a person who has not provided collateral or has not provided collateral in full size or in the defined term. The procedure for provision, release and absorption of collaterals is determined by the Rulebook for implementation of the LVAT. For failure to comply with the obligations for provision of collateral administrative-punitive liability is introduced.
Law on Ownership and Use of Agricultural Lands
A simplified procedure for acquisition of state and cooperative lands is introduced with the amendments of the Law on Ownership and Use of Agricultural Lands (SG 61/05.08.2016). Such a right will be given to the persons that have acquired ownership of building and facilities from the property of the former labor-cooperative farms and agricultural cooperatives; organizations and companies, registered under the power of Decree 922 for the usage of the land and implementation of agricultural activity; Decree 56 for business activity with property and share involvement of agricultural brigades: “КЗС“, „ТКЗС“, „МТС“, „АПК“ and agricultural institutes. In these cases the new owners can acquire the built and adjacent areas without tender. The evaluation of these areas, including when they are located outside the borders of the urbanized territory (village or settlement formation), will be made under Art. 90 from the Regulation for Implementation of the Law on State property. The tax evaluation will be defined as for lands in construction boundaries and this circumstance will be explicitly pointed in the certificate for tax evaluation.