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Factsheet for measure BG-2022-28/2762 Updated – measures in Bulgaria

VAT decrease for bread, heating and gas

Намаляване на ДДС на хляб, отопление и газ

Country Bulgaria , applies nationwide
Time period Temporary, 05 July 2022 – 31 December 2023
Context COVID-19, War in Ukraine
Type Legislations or other statutory regulations
Category Responses to inflation
– Support for energy bills
Author Ekaterina Markova (IPS-Bas) and Eurofound
Measure added 18 August 2022 (updated 01 March 2023)

Background information

These tax changes are part of an anti-crisis measures, adopted at the end of the 47th Bulgarian Parliament. The government proposed, and the parliament accepted an update of the State Budget for 2022.

Both measures are introduced at the end of the government of Kiril Petkov. Bulgaria has a caretaker government and the parliamentary elections will be held on 2 October 2022.

Content of measure

A zero VAT tax rate is introduced for deliveries of bread and flour with a place of performance on the territory of Bulgaria, for imports and for taxable acquisitions in Bulgaria. This applies to the supply of 'bread' by a VAT registered person, whether a manufacturer, wholesaler/distributor or retailer. The proposal to introduce a zero VAT rate for the supply of bread is linked to the need to mitigate the impact of high bread prices on households, in particular the most vulnerable, while avoiding supply disruptions.

Reduced VAT tax rate of 9% is introduced for supplies of natural gas and central heating with a place of performance on the territory of the country, imports and taxable intra-community acquisitions. The reduced rate of tax of 9% for central heating will apply to both thermal energy in the form of steam and hot water. The VAT on natural gas for end-users/domestic use will also be reduced to 9% for a period of 1 year. Electricity, natural gas, methane will be exempted from excise duty.

The proposal to introduce a reduced VAT rate of 9% for central heating is linked to the need to mitigate the impact of high energy prices on households and businesses, in particular the most vulnerable, while avoiding supply disruptions.

The allocated resources are: BGN 65 million in budget loss for central heating and gas and BGN 60.9 million in budget loss bread.


The following updates to this measure have been made after it came into effect.

15 December 2022

The National Assembly extended until 31 December 2023 the zero VAT rate on bread and flour, which was supposed to expire on 1 July 2023.

Use of measure

"The measure to reduce VAT on thermal energy is extremely appropriate when there is a severe crisis and huge inflation. At first, we were concerned that we had no official guidance on how to properly bill the measure on customers' accounts. The important thing is that we received the necessary clarifications, which are entirely in favour of the customers!" said the executive director of Toplofikatsia Ruse, Eng. Sevdalin Zhelev.

The data on use of both measures are not available yet (18 August 2022).

Target groups

Workers Businesses Citizens
Does not apply to workers Sector specific set of companies
Applies to all citizens

Actors and funding

Actors Funding
National government
Company / Companies
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement No involvement
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: N/A


According to the Bulgarian Industrial Association (BIA), the anti-crisis measures were not previously discussed with the social partners.

Views and reactions

Two experts from Confederation of Independent Trade Unions (CITUB) shared their concerns: "So at this stage some of the measures are quite controversial, some of the measures we would support. Regarding the VAT on bread, one should see the specific written texts for change in VAT Law, because it is not clear whether there will not be other goods, which are bakery products, to be offered as bread and accordingly to use the reduced VAT rate", stated Stanislav Popdonchev, expert of CITUB.

"Another part through indirect taxes, differentiation of rates and reduction of excise duties, elimination of excise duties is aimed at an effect that is minimal for the pocket of consumers. There is nothing about incomes, there is no anticipated growth in incomes, there is no anticipated compensation for the loss of the real purchasing power of the population, as the nearly 14.5% inflation suffered from April to April compared to last year. What we are being offered is some BGN 2 billion, which will not reach the people we want, and in our opinion, when inflation is twice as high as what is included in the budget, it is logical that there should be more high revenues - according to our estimates, about 3-3.5 billion will collect more revenue, and the package offered to us is for 2 billion." said Lyuboslav Kostov (CITUB).

Mariana Kukusheva, chairperson of the National Branch Union of Bakers and Confectioners stated that only in grey economy, the 0 % VAT won't decrease the price of the bread. According to Kukusheva, bread will become cheaper by just that much, despite the claims of many economists that this will not happen, but rather help for the bakers themselves.

One of the many criticisms of the cabinet for the anti-crisis measures was aimed at the fact that VAT is reduced to 0 on all types of bread, and not only on the basic one - as is the case with the fuel discount, for example. The final text of the law shows that the measure applies to all varieties.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      C - Manufacturing C10 Manufacture of food products
      D - Electricity, Gas, Steam And Air Conditioning Supply D35 Electricity, gas, steam and air conditioning supply
      G - Wholesale And Retail Trade; Repair Of Motor Vehicles And Motorcycles G46 Wholesale trade, except of motor vehicles and motorcycles

This case is not occupation-specific.


  • 30 May 2022: CITUB: half of the measures are not anti crisis in nature (
  • 05 July 2022: (
  • 13 July 2022: An instruction for VAT reduction as anticrisis measure (
  • 15 July 2022: NRA: Guidance on the application of 0% VAT on bread and 9% VAT on heating and gas (
  • 11 August 2022: The bills for July for hot water in Ruse will have reduced VAT (
  • 15 December 2022: NA decided: Cheaper bread until the end of 2023, VAT remains 0% (


Eurofound (2022), VAT decrease for bread, heating and gas, measure BG-2022-28/2762 (measures in Bulgaria), EU PolicyWatch, Dublin,


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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.