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The VAT for restaurant services, books, baby food and diapers becomes 9 percent
10/06/2020

The Parliament decided today that the VAT rate for restaurant and catering services, books and textbooks, baby food and diapers will be reduced from 20 percent to 9 percent.

The members of the parliament adopted changes to the Value Added Tax (VAT) Act on second reading. The reduced rate shall enter into force on 1 July of this year and will be applied until 31 December 2021.
Baby foods and diapers, for which 9 percent VAT will apply, are explicitly listed. These are the baby formulas, porridges, purees and diapers.

The United Patriots' proposal for reduced VAT for the low alcohol beverages such as wine and beer and Valery Simeonov's proposal to extend the reduced rate to tour operators were not supported.

BSP for Bulgaria's request to reduce the VAT for drugs paid by the National Health Insurance Fund, medical devices and basic foods to 9 percent was also rejected. So the rate for them remains 20 percent.

The Parliament decided that one-time benefit for covering part of the costs for the beginning of the school year 2020-2021 will also be provided to the eighth-graders' families. The Parliament decided with amendments to the VAT Act that the families of eighth-graders with an average monthly income per family member up to BGN 450 will receive a one-time benefit for covering part of the costs for the beginning of the school year 2020-2021.

The amendments are written in the transitional and final provisions of the bill. They also amend texts of the State of Emergency Act.

Until now, first graders received a one-time benefit of BGN 250 under the Law on Family Allowances for Children. The adopted texts also provide benefits for children who are enrolled in eighth grade in a public or municipal school for the 2020/2021 school year, in case the children live permanently in the country and are not placed for care outside the family.

The amount and procedure for granting and payment of the benefit will be determined by a decree of the Council of Ministers on a proposal from the Minister of Labour and Social Policy.

The benefit will be provided regardless of the income for families with children with permanent disabilities, for children with one living parent or children, placed in families of relatives and foster families.

The sum is intended to be paid on two occasions, 50% of it will be paid after the entry into force of the order for its granting, and the remainder will be paid at the beginning of the second school term of the school year 2020/2021 if the child continues to attend school. If the student skips classes five times within a month or does not enter school without proper health reasons during the second term, the amount of the benefit will be reimbursed.

The Parliament finally decided with the amendments to the VAT Act voted on second reading that the front line officers in the fight against COVID-19 will be able to use holiday vouchers amounting to BGN 210 until 31 November 2021.

The Members of the Parliament decided that the benefit for the use of basic local tourism services should be used during a person's leave period for not less than 7 nights at sites or categorised or registered accommodation places. An advantage is placed on the sites of companies whose sole owner of the capital is the National Insurance Institute, rehabilitation hospitals and state-owned health centres and ministries' holiday stations.

The measure is open to doctors, health professionals in medical institutions, regional health inspection officers, emergency medical centres, the National Centre of Infectious and Parasitic Diseases, the Ministry of Interior, the Ministry of Defence, the Ministry of Labour and Social Policy and the National Toll Administration, who directly carry out activities related to the control and prevention of the spread of COVID-19. The group of eligible persons will be determined by the line ministers with a written order for each of them.

The benefit will be paid in advance within 14 days prior to its use on the basis of the order issued. After the benefit is used, the orders shall be certified, stamped and dated by an official at the accommodation sites or places, a supporting document for the payment should be made and a certified statement of account shall be issued to the entitled person. The person entitled shall provide the authority which paid the benefit with the certified documents within seven days of the return, but not later than one month after the use of the benefit.

If an infringement is detected, the amount will be reimbursed by the person, including by deduction from his/her remuneration. It is envisaged that the procedure for the use of the benefit in the sites and accommodation places will be determined by an act of the Council of Ministers on the proposal of the Minister of Tourism and the Minister of Health.

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