Bill for Amendments to the VAT Act Regarding the Rules for Reporting Sales

By Ivan Alexander Manev, Dimitrov, Petrov & Co. Law Firm

On September 11, 2020, the Bill for Amendment of the Value Added Tax Act (VATA) was introduced for public discussion. The bill proposes the amendment of various tax acts (VATA, Excise Duties and Tax Warehouses Act, Corporate Income Tax Act, etc.), aiming at complying with European legislation and refinement of various provisions.

One of the amendments widely commented on, is that of Art. 118 of the VATA. This is the provision stipulating the adoption and contents of the 2006 Ordinance Н-18 of Ministry of Finance. Thе amendment proposes the rules for the use of retail management software approved by the NRA (known as RMS) to be cancelled. The bill pursues to deliver on the commitment made by the Minister of Finance to repeal the disputed texts of the VATA and Ordinance Н-18.

It should be reminded that the entry into force of the rules for the development, functionalities, approval and use of RMS has been postponed several times, and the Ordinance has undergone plenty of amendments and supplements. Following the statement of the Minister of Finance in early August and the publication of the current bill, a number of misconceptions have spread among the public speculating that a large part of the obligations related to sales reporting and even Ordinance No. Н-18 as a whole is to be repealed.

What is provided for in the current bill:
  • cancellation of the obligation of declaring and approval by the NRA of retail management software (RMS);
  • cancellation of the obligatory use by retailers of approved RMS only;

In other words, if the bill is to be adopted with this wording, only the obligation to use licensed RMS will be cancelled. Retailers will be allowed to use their preferred software without having to declare it to the NRA. The rest of the obligations for the business, introduced by Ordinance H-18 are not to be amended.

In short, the following remain:
  • the obligation to issue a receipt from an approved fiscal device upon receipt of payments in cash or by credit/debit card;• the obligation of remote connection of the used fiscal devices with the NRA;
  • the obligation for fuel dealers to use an approved type of software (EFMS). All special rules remain for these dealers;
  • the obligation of registration with the NRA for the persons carrying out trading activities through an e-shop.

This bill is aimed at amending the VATA, that is the legislative framework of Ordinance No. Н-18. Should the proposed texts be accepted, the relevant amendments to the Ordinance are yet to be made.

The public discussion of the bill is planned to be ongoing until October 11, 2020, whereupon the bill will be introduced to the National Assembly for voting.

About the author

Ivan Alexander Manev is an associate at Dimitrov, Petrov & Co. Law Firm. The above text does not constitute a legal advice or consultation and should not be considered sufficient for resolving specific legal issues, cases, etc.

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