In connection with the submitted draft amendment to the Law on Value Added Tax, the Confederation of Employers and Industrialists in Bulgaria, after taking into account the opinions expressed by the member companies of the organization and the Bulgarian Association for Leasing, a collective member of KRIB, expresses the following position:
In the preparation of the proposals, we have been guided by the aspiration to apply the best European practices in relation to the taxability of VAT.
The proposed revisions are aimed at achieving greater clarity of the norm and avoiding the possibility of different interpretation both by the revenue administration and by individual leasing companies and other private legal entities.
In this way, the main goals of any legal norm will be achieved, namely - creating stability in the regulated relations, as well as ensuring predictability regarding its consistent and uniform application both by the subjects of the law and by the authorities authorized to monitor its compliance .
1. In § 1, item 1, we propose the following revision:
1. Paragraph 2, item 3 is amended as follows:
"3. the actual provision for use of goods to a lessee under a lease contract, which transfers all risks and benefits of ownership of the goods, and it is expressly provided forthe transfer of the right of ownership to the goods at the end of the contract or the sum of the net installments under the lease contract is practically identical to the market value of the goods on the date of its provision for disposal;"
2. In § 27 item 1 the expression "January 1, 2013." and replaced by "January 1, 2014."
Motives:
Legal logic and the provision of legal stability require that the VAT law – as a substantive and not a procedural law – be non-retroactive, maintaining the VAT regime for transactions with a status quo prior to the entry into force of the law.
3. In § 26 new items 3 and 4 are created with the following content:
3. Item 72 is created:
"72."Net lease payments" are the sums owed by the lessee under the contract, with the exception of the supply of financial services under Article 46, paragraph 1, item 1, other fees under the contract, insurance amounts, local taxes and fees, the value of the transfer option of the ownership of the goods and the tax due under this law."
4. Item 73 is created:
"73."Practical Identity"
Motives:
Item 3 of Article 6, Paragraph 2 introduces a new concept of "practical identity". A concept with which no tax normative act in the Republic of Bulgaria has dealt with so far. We believe that it is extremely important that in the additional provisions of the VAT, clear, objective and impermissible interpretation criteria regarding the determination of the practical identity for the purposes of the amended provision are defined. We expect that the specification of the concept will be proposed by the legislator depending on the intention involved in the preparation of the proposals to change Article 6, Paragraph 2, Item 3.
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