IMPORT OF MACHINES TO BE VAT-EXEMPT
The lifting of Value Added Tax (VAT) on the import of investment goods is one of the important preferences, proposed by the Cabinet. However, the respective procedure underwent serious amendments as compared to the initial version and became quite complicated.Prior getting a permission to effect the import, the importer should fulfill a number of conditions, and the investment project for which the imported goods are intended should be approved by the finance minister. The minister approves projects, whose term is more than a year, the size of investments is at least BGN10MN, and opening of more than 50 working positions is projected. When giving an approval, the importer's financial state assessed by a registered auditor and the presented guarantees, proving his possibilities to ensure financially the project, are being taken into consideration as well. After getting the finance minister's approval and if he has no outstanding liabilities to the budget, the municipality, the National Insurance Institute, and the National Healthcare Insurance Fund, the project's executor shall apply to the territorial directorate for a final permission to be VAT-exempt when importing the respective goods.The importer will not be relieved of paying VAT but will also be entitled to a tax credit for money that has not been paid. The reason is that the importer of such goods is entitled to calculate tax himself (without paying it). And having calculated it, he is entitled to getting a tax credit. It is this nonsensical provision which makes abuse possible.