Indirect tax – specific exemptions or privileged rates

The general principle is that the legal entities with non – profit purposes are not taxed for the activities pursuing their statutory goals. NGOs are taxable persons according to the Law on Value Added Tax /LVAT/ and they pay value-added tax at same rate as commercial organizations. The rate of VAT in Bulgaria is 20% on all goods and services.

Persons must register and charge VAT, when their independent economic activity results in turnover exceeding 50,000 BGL. An NGO has a right for tax refund after registration as a taxable person under LVAT.

The LVAT defines some transactions as tax exempt as those for export and for performance of educational and health services, sales of tickets for sports and cultural performances, art galleries and theatres except for bars and erotic performance. There is a special exemption for fundraising activities of NGOs. Exempt delivery shall be the delivery of goods and carrying out services by organizations, which are not traders, and which lay down aims of political, trade-union, religious, patriotic, philosophical, philanthropic or civilian character, when the delivery is in connection with actions for gaining assets, used for their activity or for achieving the goals laid down.