Don’t miss the chance to get your VAT refund in Bulgaria
Article 3 minute read

Don’t miss the chance to get your VAT refund in Bulgaria

26 May 2016

As the deadline for the 2015 claims is just around the corner, it may pay to check if your company is eligible for a VAT refund in Bulgaria.

EU countries refund VAT to companies established in non-member states. In Bulgaria, however, a licensed VAT agent is required to drive you through the process.

VAT refunds under the EU 13th VAT Directive

In line with the EU’s 13th VAT Directive, member states refund EU VAT incurred by companies established in non-EU countries. Bulgaria is no exception and more and more companies are benefiting from this previously underutilised option. The number of claims is now rising but the number of companies licensed to support applicants through the procedure is still limited.

TMF Bulgaria is one of the very few entities providing this support and we have been assisting companies through the process ever since Bulgaria joined the EU.

Why are companies reluctant to start the VAT refund process?

We have noticed that many companies do not claim VAT simply because they are unaware they have the right to do so. Other companies seem reluctant to start a heavy procedure that may prove to be unworthy of the effort invested. Meanwhile, the language barrier is an issue for some foreign companies, as most documentation and communication with the local authorities must be done in the Bulgarian language. This is where TMF Bulgaria can help.

Once they have successfully completed the process and received their VAT refund, many companies realise they have missed this opportunity for years. If the conditions prescribed in the local legislation (which is in line with EU legislation) are met, the applicant will be granted a VAT refund which would have otherwise been waived.

Is your entity eligible for a VAT refund?

Bulgaria currently refunds VAT to companies established in 10 non-EU countries, with the most claims received from Swiss entities. The eligible countries are:

  • Switzerland
  • Serbia
  • Macedonia
  • Israel
  • Iceland
  • Republic of Korea
  • Moldova
  • Ukraine
  • Norway
  • Canada

The applicant should make sure that the goods or services purchased in Bulgaria are further used for taxable supplies in its country of establishment. The VAT that has been incurred should also fall within the general rules allowing VAT credit.

An important requirement for the VAT refund to be granted is that no taxable supplies have been performed in Bulgaria in the course of the year for which the VAT refund is claimed. The only exceptions are for transport services and sales of goods/services for which the local clients have self-charged VAT. The applicant files a written declaration stating that this requirement is met.

If these conditions are met and the correct documentation is submitted according to local rules, the claimant may expect a VAT refund in five to six months.

Talk to us

Our experts in Bulgaria can assist enterprises that have incurred VAT in the course of the year 2015 by preparing and submitting their VAT refund claims by 30 June 2016, the deadline for applications. We can also assist with VAT refunds for entities established within the EU.

Need more information? Get in touch with our experts in Bulgaria.

Find out about our Accounting and Tax services worldwide.

Written by

Stiliyan Vladimirov

Legal Manager

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