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June 29, 2023
2023-1158

Bulgaria proposes to continue measures addressing high energy prices affecting electricity providers

Bulgaria is considering requiring electricity providers (producers and traders) to continue paying "special purpose contributions" for six additional months, through the end of 2023.

Background

In October 2022, the European Union (EU) adopted "Regulation 2022/1854 on an emergency intervention to address high energy prices," which introduced a common standard for combating high prices in the electricity markets and a mandatory cap on market revenues of participants in these markets.

Following this, the Bulgarian state attempted last-minute implementation of the Regulation by introducing a requirement for electricity producers and traders to pay special purpose contributions.

Initially, under the Regulation, these contributions were due for transactions occurring between 1 December 2022 and 30 June 2023.

Proposal

Now, the Bulgarian state proposes to extend the duration of the special purpose contributions, making them due for transactions occurring between 1 July 2023 and 31 December 2023.

This six-month extension could financially affect businesses, especially where they have failed to report transactions or to pay contributions on time or in full. Moreover, in Bulgaria, responsibility for collecting these amounts rests with the tax authorities.

Implications

The measures raise questions and uncertainties, and their proper application requires case-by-case analysis.

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For additional information with respect to this Alert, please contact the following:

Ernst and Young Law Partnership Bulgaria, Sofia

Milen R. Raikov | Milen.Raikov@bg.ey.com

Lora Terzieva | Lora.Terzieva@bg.ey.com

Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor

 

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