The VAT Package

Are You Ready for 1 January 2010?

The VAT Package adopted by the EU will come into effect in the Member States on 1 January 2010.

Significant changes to the rules for place of supply for services will be introduced. The procedure under which EU businesses can reclaim VAT incurred in other Member States will be simplified.

Most of the new VAT rules have been reflected in the proposed amendments to the Bulgarian Value Added Tax Act.

The new VAT rules are associated with opportunities for VAT planning of international service flows of companies. Businesses may however be confronted with additional costs needed to comply with the new VAT regulations. By 1 January 2010, companies will need to rethink their cross-border arrangements and to undertake the necessary modifications, including to their ERP systems.

The new VAT rules will impact any business engaged in the cross-border supply of services, including those which make or receive inter-company recharges.

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