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Bulgarian VAT
Bulgaria comes under the EU VAT regime and is part of the EU single market economy. VAT Directives are issued by the EU which lay out the principles of the VAT regime to be adopted by the member states. These Directives take precedent over the local legislation.
Bulgarian VAT law
Bulgarian VAT law is contained within the Value Added Tax Law 2007. It is administered by the Bulgarian Ministry of Finance and the National Revenue Agency.
Bulgarian VAT Registration
Foreign companies may register for VAT in Bulgaria without the need to form a local company, which is known as non-resident VAT trading. The VAT registration threshold in Bulgaria is 50,000 BGN (approximately EUR 25,500) for all traders. If this threshold is surpassed in any period of 12 months or less, then the company is obliged to submit an application for VAT registration within 14 days of the end of the month in which the threshold was crossed.
There are strict rules on the situations where a registration is permitted. Common scenarios which require a Bulgarian VAT registration include:
- importing goods into Bulgaria
- organising live events, conferences etc. in Bulgaria
- holding goods in a warehouse in Bulgaria as stock for resale longer than three months
- 'supply and install' services over 12 months
- selling goods from Bulgaria to other EU countries
- distance selling to private individuals in Bulgaria, e.g. internet retailing.
Registering for Bulgarian VAT generally takes two weeks once all the documents have been collected and sent to Bulgaria.
Bulgarian VAT compliance
There are detailed rules controlling the recording and processing of Bulgarian transactions. These include guidelines on:
- Bulgarian invoice requirements
- use of the 'reverse charge' procedure
- foreign currency reporting and translation
- correcting errors from prior returns
- credit notes and corrections
what accounting records must be maintained (in fact, for non-resident VAT registrants no accounting records should be kept).
Bulgarian VAT rates
The standard VAT rate in Bulgaria is 20%. There is a reduced rate of 9% for hotel accommodation, and other goods and services.
There are many variations to the rates above, including exempt taxable supplies. Please contact us to learn more.
Bulgarian VAT returns
Companies with a Bulgarian VAT number must submit periodic returns detailing all taxable supplies (sales) and inputs (costs). VAT returns in Bulgaria are submitted on a monthly basis. The deadline for submission of periodic returns is 14 days following the month end.
Bulgarian fiscal representative
From 1 January 2010 it is no longer a requirement for EU non-resident businesses wishing to VAT register in Bulgaria to appoint a fiscal representative. It is, however, still recommendable to have an agent based in Bulgaria who can act for the company and with whom the Bulgarian tax authorities can, if required, communicate, conduct tax inspections, and examine invoices and records.
It is a requirement that non-EU businesses appoint a fiscal representative in Bulgaria.
Bulgarian Intrastat and EC Sales Lists
In addition to VAT returns in Bulgaria, companies may be required to submit extra statistical information.
The Bulgarian Intrastat Declaration lists sales (dispatches) and purchases (acquisitions) within the EU region and must be filed monthly once the annual threshold is exceeded.
The Bulgarian EC Sales List, or recapitulative statement, details customers and the values of sales made to them. It is to be submitted along with the monthly VAT returns and there is no threshold for reporting.
Bulgarian VAT refunds
If a foreign company incurs Bulgarian VAT on local goods or services then VAT may be recovered through a VAT reclaim. Indeed, in order to receive VAT credit you have to declare that you have no taxable supplies in Bulgaria. If you make taxable supplies you may use VAT credit only after registering for VAT purposes in Bulgaria.
From 1 January 2010 EU-based businesses will submit VAT refund applications through the tax authorities of the applicant’s home country.
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