Tax regulation mechanism (Tax Reduction for Biofuels)
Updated: 23.01.2019
Author: Ivana Naydenova
Following financial incentives are applied to promote the use of biofuels:
- a reduced rate of excise duty for unleaded petrol when bioethanol with 4% to 5% of volume has been added;
- a reduced rate of excise duty for gas oil when biodiesel with 4% to 5% of volume has been added.
Eligible technologies
Subject to the tax allowance are only biofuels.
| Biofuels | - "Biodiesel" is a methyl ester produced from vegetable oils or animal fats with the quality of diesel fuel intended for use as fuel for diesel engines made from biodegradable fraction of products, waste and residues from agriculture (including vegetal and animal substances), forestry, and the biodegradable fraction of industrial and household waste (art. 4 no. 22 ZADS).
- "Bioethanol" means ethanol produced from biomass and / or the biodegradable fraction of waste, which is intended for use as biofuel (art 4 no. 23 ZADS).
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Amount
The reduced rate of excise duty, approved by the Commission, is applicable to biofuel blends of 4% to 5% inclusive. The reduced rates are valid for 2 years from the date of approval of the scheme notified.
- For unleaded petrol used in transport, meeting the sustainability criteria laid down in art. 37 par. 1 and 4 of ERSA as well as the technical and quality requirements of art. 51 par. 2 ERSA, in which the content of bioethanol is 4 percent or more by volume – BGN 646 (€ 323) for 1,000 litres (art. 32 par. 8 ZADS). Otherwise: BGN 710 (€ 360) for 1,000 litres (art. 32 (1) ZADS) – tax reduction of BGN 64 (€ 32) for 1,000 litres (art. 32 par. 2 ZADS).
- For gas oil used in transport, meeting the sustainability criteria laid down in art. 37 par. 1 and 4 of ERSA as well as the technical and quality requirements of art. 51 par. 2 ERSA, in which the content of biodiesel is 4 percent or more by volume – BGN 646 (€ 323) for 1,000 litres (art. 32 par. 9 ZADS). Otherwise: BGN 710 (€ 360) for 1,000 litres – tax reduction of BGN 64 (€ 32) for 1,000 litres (art. 32 (1) ZADS).
Addressees
Entitled party: End consumers of biofuels resp. fuel producers
Procedure
Competent authority | Bulgarian Ministry of Finance |
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Distribution of costs
| State | The costs of the tax exemption are borne by the state, which receives lower tax revenue. |
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Bulgaria
