VAT compliance in Bulgaria

Taxation police will investigate cases of tax evasion

Bulgaria may soon become SE Europe's taxation heaven, as the government plans to lower the VAT rate in the country by one percent by 2013.
This became clear from an interview of finance minister Simeon Djankov with the Standart daily.

We will hardly be able to lower the VAT rate in the country to 18%, but a smaller step is more feasible, Djankov said.
Most probably, the decrease will not be announced in advance, so that a possible contraction of domestic consumption could be prevented.
According to Mr. Djankov, the Cabinet is mulling the establishment of taxation police, which to investigate cases of tax evasion and VAT fraud. The tax cops will have the right to collect evidence, carry out investigations and execute arrests. Their powers may be expanded, if the results of their work are encouraging.