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The new Finance Minister Kiril Ananiev officially reaffirmed his July 31 request to completely abandon the idea of tightening control over merchant turnover by regulating software for reporting sales. The Ministry of Finance proposes that all texts in this direction be eliminated from the VAT law, it is clear from the package of fiscal changes for 2021.
The change in the direction of the Finance Ministry was announced in the first week after the resignation of former Finance Minister Vladislav Goranov, who was the strongest defender of the changes. The refusal also came at the beginning of the anti-government protests as part of the government’s efforts to meet the expectations of various disgruntled social groups and businesses.
If the changes are voted on in parliament, it will end the battle that has lasted about two and a half years to introduce tighter control over billing reports at points of sale.
In February 2018, the Ministry of Finance announced for the first time that it intends to regulate the sales management software (SUPTO) used in most points of sale, which was out of control at the time. The main argument was that the tax authorities found the most ingenious methods to conceal the turnover, in which the cash register issued a note, but when manipulating the software, the records were subsequently erased and did not reach the NRA. According to the Tax Agency, the hidden business volumes varied between 30% and 70%.
For nearly three years, the NRA and business associations have held hundreds of meetings, public discussions, and consultations to improve the changes to Ordinance H-18. The changes were repeatedly postponed on the personal order of Prime Minister Boyko Borissov to please business. One of the most staunch opponents of the texts were the representatives of the catering and restoration sector, which is among the gravest in the country, but in recent months with lobbying pressure, it managed to make a series of concessions from Borisov under the pretext that you are very affected by COVID-19.
Employers’ organizations have also repeatedly complained about the changes, as the regulation has created a number of practical difficulties, especially for large foreign companies with specific business processes.
Now, however, the law offers nothing to replace the missing texts. The Ministry of Finance does not undertake to propose another type of regulation, to improve billing reports.
“Over the past 2 years, despite ongoing dialogue between vendor management software vendors / distributors and users, and many proposals adopted to clarify provisions regarding retail management software requirements, there are still Consequently, it was concluded that at this time the requirements of the software for the management of sales in a commercial site cause difficulties, contradictions and obstacles for the business, for which the provisions of Article 118 of the VAT Law, relative to the requirements of declaration and use of the sales management software, it will be repealed ”, reads the motives of the Ministry of Finance.
Companies are happy with the change in government policy.
“We support the initiative of the Ministry of Finance to abandon the way of regulating SUPTO in the current form. We need a new and modern framework for the control of traces when working with fiscal instruments. We are ready to participate in such initiatives,” said the Bulgarian president to Mediapool. Yasen Tanev Enterprise Software Development Association. According to him, in the last three years the business has lost millions of euros in an attempt to adapt to the changes in Ordinance H-18.
With the package of fiscal problems for 2021, the government does not propose almost any other significant changes, it follows from the draft published on the MH website.
Among the few changes is, for example, the new deadline, November 25, to file the declaration of changes in corporate tax advances pursuant to art. 88 of the Corporation Tax Law. The aim is to ensure greater predictability of tax revenue in the budget and to avoid the concentration of significant revenue from prepayments in mid-December, leading to too short a time frame for establishing budget relationships.
Another text broadens the possibility of applying the tax relief for carrying out productive activity in municipalities with unemployment, higher than the country’s average in cases of minimum aid contemplated in art. 188 of CITA. The tax credit will continue to apply after the current deadline, December 31, 2020.
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