VAT On Tourist And Travel Services In Bulgaria Changes On April 1st, 2011

The value added tax on tourist and travel services will change in Bulgaria on April 1st, 2011. The current differential tax rates of 7 percent for group packages and 20 percent for individual packages will become a single tax rate of 9 percent for all tourist packages. It is still unclear if the tax rate for the additional services which are not included in the packages will still be 20 percent or it will be 9 percent as well.

As most of the all inclusive packages are resold by travel agencies, therefore included in the group travel category, the tax rate for the end users will change from 7 percent to 9 percent, ending in a 2 percent growth.

In spite of the single VAT rate, it is still a good idea to sign a contract with a travel agency in your country, which will bear the responsibility for the fulfillment of the holiday package before the end users, thus buffering the communication with the holiday package provider. It is also more convenient to have the responsible party handy in your country in case you need to take some legal action. The Bulgarian courts are well known for their unpredictability and sluggish lawsuits.

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