Bulgaria – 0% VAT rate proposed on essential food

Bulgaria is reviewing a draft bill proposing a 0% VAT rate on essential food and beverages.

The rising cost of living has been a heavy burden for households across Bulgaria. To combat food prices and ease financial pressure on citisens, Bulgaria’s parliament is actively reviewing a major piece of legislation that includes a proposal to implement a 0% VAT rate on essential foods and beverages. If the draft bill is passed into law, the zero-rate VAT will not apply to all groceries. Instead, it will be strictly limited to the essential food items found in the National Statistical Institute’s “small consumer basket” for the Consumer Price Index (CPI). These are the everyday staples most vital to low-income households, including:

– Bread and basic flour

– Milk and dairy products

– Basic meats and poultry

What This Means for Businesses

If the zero-VAT legislation is finalised, businesses in the food supply and retail sectors will face immediate operational adjustments. Retailers, grocers, and catering services will need to:

– Update VAT determination logic to apply the zero percent rate to the eligible basket of goods.

– Reconfigure invoicing processes and reporting systems to correctly reflect zero-rated treatments.