THE Finance Ministry this week approved the first project to which VAT breaks for investment goods imports will apply.
The project, approved on Monday, was presented personally by Finance Minister Milen Velchev, his deputy Gati al-Jeburi and Anton Petrov, representative of the Greek company Viohalco, owner of Sofiamed.
Al-Jeburi said that an amendment to the VAT Act had made it possible for investors to import goods and equipment without paying VAT on import as of January 1 this year.
The pre-conditions are that the investment project should be approved by the Finance Ministry, the entity must be VAT-registered and must not have executable obligations to the state. The project should be implemented within two years, investment should exceed 10 million leva and more than 50 jobs should be created.
Applicant companies are required to prove they can finance the project with a loan or with their own resources. Al-Jeburi said the procedure had already attracted some serious interest. Three more projects have reached the co-ordination stage.
Viohalco is the first company to have submitted to the Finance Ministry all the necessary documents entitling it to VAT-exempt investment goods imports.
Petrov said that thanks to project implementation, Sofiamed, formerly the non-ferrous metal combined works of Sofia, would fully modernise its production. Capacity will quadruple from
30 000 to 120 000 tons.
Initially, the project was worth 50 million euro in 2000. Its cost gradually increased. After the plant was privatised, 180 people started work, and now it has a workforce of 240. It will reach 450 when capacity increases to 120 000 tons.
The company will import machinery and equipment worth 35 million euro but it will not effectively pay the seven million euro VAT due on the import, which will help it complete the reconstruction and renovation of Sofiamed a few months earlier, by August.
Given the average price of the output of 3 to 3.5 euro a kilogram, the company's annual turnover is expected to reach 350 to 400 million euro. Between 5 and 10 per cent of it will be sold on the Bulgarian market, the remainder will be for export.
Work is under way on shortening the input tax recovery period for major investment projects from 45 to 15 days, Al-Jeburi announced.
The project, approved on Monday, was presented personally by Finance Minister Milen Velchev, his deputy Gati al-Jeburi and Anton Petrov, representative of the Greek company Viohalco, owner of Sofiamed.
Al-Jeburi said that an amendment to the VAT Act had made it possible for investors to import goods and equipment without paying VAT on import as of January 1 this year.
The pre-conditions are that the investment project should be approved by the Finance Ministry, the entity must be VAT-registered and must not have executable obligations to the state. The project should be implemented within two years, investment should exceed 10 million leva and more than 50 jobs should be created.
Applicant companies are required to prove they can finance the project with a loan or with their own resources. Al-Jeburi said the procedure had already attracted some serious interest. Three more projects have reached the co-ordination stage.
Viohalco is the first company to have submitted to the Finance Ministry all the necessary documents entitling it to VAT-exempt investment goods imports.
Petrov said that thanks to project implementation, Sofiamed, formerly the non-ferrous metal combined works of Sofia, would fully modernise its production. Capacity will quadruple from
30 000 to 120 000 tons.
Initially, the project was worth 50 million euro in 2000. Its cost gradually increased. After the plant was privatised, 180 people started work, and now it has a workforce of 240. It will reach 450 when capacity increases to 120 000 tons.
The company will import machinery and equipment worth 35 million euro but it will not effectively pay the seven million euro VAT due on the import, which will help it complete the reconstruction and renovation of Sofiamed a few months earlier, by August.
Given the average price of the output of 3 to 3.5 euro a kilogram, the company's annual turnover is expected to reach 350 to 400 million euro. Between 5 and 10 per cent of it will be sold on the Bulgarian market, the remainder will be for export.
Work is under way on shortening the input tax recovery period for major investment projects from 45 to 15 days, Al-Jeburi announced.
