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Bulgaria cuts VAT on heating, accommodation and bread to combat 14.4% inflation

Temporary tax breaks on domestic fuel and basic foodstuffs

The Bulgarian government has proposed temporarily reducing the Value Added Tax rate on domestic heating and bread. The National Statistical Institute said that Bulgaria’s consumer prices rose by annualised inflation rate of 14.4% (12.4% in March). Food inflation hit 20.2% and domestic energy reached 15.2%.

The average annual inflation rate in 2021 was 3.3%.  VAT on domestic heating, electricity, fuels and natural gas will be cut from 20% standard rate to 9%.

Accommodation services – hotels, hostels, home sharing – would be reduced to 9% VAT.

VAT on bread is zero-rated for one year.

The new rates would come into effect from 1 July 2022.

Many other EU states cutting VAT on fuel. In April 2022, EU completed new reduced EU VAT rate setting freedoms  To receive our free global VAT and GST news updates, sign-up here.

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