Taxing issues in Bulgaria

Lorys Charalambous writes on Cyprus’ Tax-News.com about the court ruling in Bulgaria about recent renewable energy tax.

Bulgarian Court Finds Renewable Energy Tariff Unconstitutional

Bulgaria’s Constitutional Court has ruled that a 20 percent tax on renewable energy producers is unconstitutional.

The decision was supported by ten of the Court’s 12 constitutional judges. In a brief statement, the Court said that the full text of the ruling would be published at a later time.

The legal challenge was lodged by the country’s president, Rosen Plevneliev, after 116 out of 182 Bulgarian MPs voted in favor of the hike as part of the 2014 Budget.

Bulgaria’s Ministry of Economy and Energy argued that producers of renewable energy had previously enjoyed a preferential tax regime due to the risks of investing in new technology, but that this was no longer necessary.

However, Plevneliev said that the tax would damage the business environment, put off foreign investors, and contravene constitutional principles of free enterprise. He also complained that the tax was being introduced without transparency.

Although the post of President in Bulgaria has little real power, Plevenliev said that it was his “democratic right” to ask the Court to rule.