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VAT to be charged on legal representation in court from 2010

Wed, Nov 25 2009 11:27 CET

byThe Sofia Echo staff

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VAT to be charged on legal representation in court from 2010

Photo: асен тонев

Legal representation in court will be taxed with VAT, Parliament decided on November 25 2009, Bulgarian-language Dnevnik daily said.

This was provided in the amendments to the VAT Act approved by MPs on second reading.

The issue with lawyers’ fees surfaced in November when it became clear that an amendment to the VAT Act is about to be adopted, which would include lawyers in the list of professions that will have to pay VAT. The amendment followed a warning letter from the European Commission, which said that VAT-free lawyers’ fees was not in compliance with European Union legislation.

The amendment was vehemently opposed by bar unions, who said that it would raise a financial obstacle for people using legal representation because the VAT would be covered by the client, not lawyers.

Another change to the law provides for shortening the period under which VAT is reimbursed to companies. Currently this period can last up to four and-a-half months. The changes aim to bring this period down to up to three months at the most.

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