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VAT Registration in Bulgaria - 2024 Update

VAT Registration in Bulgaria

Updated on Friday 17th May 2024

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The standard VAT rate in Bulgaria is 20%. Most supplies in Bulgaria are liable to VAT and legal entities and tax liable individuals must register for VAT at the competent authorities. Reduced rates and exemptions are available. Our Bulgarian lawyers can help you apply for VAT numbers.
 
VAT registration is required for all Bulgarian companies and tax liable persons who produce VAT taxable sales in this country that reach the 100,000 BGN limit (approximately 51,100 euros) within a financial year. Any legal entities or taxable individuals who record taxable sales below this limit can register for VAT voluntarily
 
 
 Quick Facts  
We offer VAT registration services

 Yes

Standard rate 

20%

Lower rates

9% on hotel accommodation, tourist services, books

Who needs VAT registration

- local companies supplying VAT-taxable goods and services,

- foreign companies,

- natural persons involved in intra-Community VAT-taxable sale or purchase of goods/services

Time frame for registration

 Approx. 2 weeks

VAT for real estate transactions

- sale of residential real estate is exempt from VAT,

- for commercial real estate sales and purchases the standard VAT rate applies

Exemptions available

- residential real estate sales,

- intra-Community transport,

- international transport

Period for filing

Monthly

VAT returns support

Yes

VAT refund 

- for non-EU citizens buying goods and services,

- for EU-based companies 

Local tax agent required

Yes, for non-EU companies

Who collects the VAT

The company selling the VAT-taxable goods or services

Documents for VAT registration

- Declaration of taxable income,

- company's Articles of Association,

- Trade Register extract

VAT number format

Country code BG followed by a 9 or 10-digit number

VAT de-registration situations

- company dissolution,

- the company no longer meets the annual turnover threshold for registration

How to register a foreign company for VAT in Bulgaria

 
The legislation allows foreign businesses to register for VAT in Bulgaria without setting up a local business. For all traders, the VAT registration threshold in Bulgaria is 100,000 BGN (approx. 51,100 EUR). The business must submit a VAT registration application within 14 days after the end of the month in which the threshold was exceeded if it exceeds it in any period of 12 months or less.
 
The circumstances under which registration is allowed are subject to tight regulations. Certain situations that require a VAT registration in Bulgaria include:
 
  • bringing goods into Bulgaria;
  • storing products in a warehouse in Bulgaria as stock for resale for more than three months organizing various events;
  • distance selling to private individuals in Bulgaria, like online retail;
  • selling items from Bulgaria to other EU countries during a 12-month period.
 
Once all the necessary paperwork has been gathered and sent to Bulgaria, the registration process for Bulgarian VAT takes approximately 2 weeks to complete.
 
 
Our lawyers are at your disposal if want to apply for a VAT number. Also, as a foreign citizen, if you plan on moving here in order to run your business, you can rely on our immigration lawyers in Bulgaria.  One of the ways through which you can move and obtain a residence permit in Bulgaria is by opening a company. Our law firm in Bulgaria specializes in a wide variety of legal areas, including immigration and business incorporation, so do not hesitate to get in touch with us for detailed information on all our services.
 

Register for VAT in Bulgaria as a local business

 
When VAT registration is compulsory (the set threshold is exceeded), the application for registration with the tax authorities is to be submitted within 14 days after the end of the tax period during which the amount was surpassed. Registration is mandatory in case of:
 
  • intra-EU acquisitions;
  • for the supplied of assembled and installed goods and the supply of services when the tax is chargeable on the recipient.
 
Any tax liable person or legal entity in Bulgaria not registered for VAT purposes can be automatically registered by the competent authorities and different penalties can apply. 
 
Branches and representative offices in Bulgaria are registered through the standard VAT registration procedure, however, non-residents with a fixes establishment in their country or origin that effect taxable supplies are to be registered through the agency of an accredited representative. This is not required, however, when the non-resident is established in another Member State or in a third country with which Bulgaria has signed a legal assistance treaty. Our immigration lawyers in Bulgaria can also provide more information about moving to this country. Citizenship in Bulgaria can be awarded by birth in accordance with the right of blood principle, according to which citizenship is inherited through parent or parents, like virtually every other nation in Europe. Everyone born on the territory of the Republic of Bulgaria has the right to birthplace citizenship (provided that there is no other citizenship).
 
Deregistration takes place upon the dissolution of the company (with or without liquidation) or the death of the natural person/sole trader who was registered for VAT purposes. In some cases, deregistration can be commenced by the Revenue Authority.
 
The 2024 VAT registration procedure in Bulgaria can be completed online with the help of our law firm upon company incorporation. If you need assistance, you can count on us for various services.
 
Below, our team answers some common questions about the Bulgarian VAT regime for 2024, obtaining refunds as well as other issues.
 

VAT regulations in Bulgaria

 
Bulgaria is a member of the EU single market economy and is subject to the EU VAT policy. The EU issues VAT Directives that outline the fundamentals of the VAT regime that the member states must implement. Local legislation is superseded by these Directives.
 
The Value Added Tax Law of 2007 contains the Bulgarian VAT regulations. The National Revenue Agency and the Ministry of Finance of Bulgaria are in charge of its administration.
 
Feel free to address our Bulgarian law firm for details on the tax legislation applicable here.
 

Goods and products subject to VAT in Bulgaria in 2024

 
The standard VAT rate of 20% applies to taxable supplies of goods or services and the import of goods. Intra-community acquisitions and various other actions fall under the scope of the European Community. In order to simplify the VAT registration and verification procedure within the European Union, traders have the option to register for an EORI number. Our Bulgarian lawyers can provide complete details about this registration.
 
A reduced VAT rate of 9% applies in Bulgaria for hotel accommodation and other touristic establishments. A zero VAT rate applies for: international transport of goods and international transport of passengers, supplies concerning international transport, duty-free trade supplies and others.
 
The following categories of services are exempt from VAT in Bulgaria:
 
  • health care supplies;
  • social security and welfare supplies;
  • supplies related to culture or religion;
  • supplies related to land and buildings;
  • gambling;
  • postage services and stamps etc.
 
You can obtain more information on VAT registration in Bulgaria in 2024 from our local lawyers. They can also offer details on immigration to Bulgaria.

What are the requirements for reporting?

 
Companies subject to value-added tax need to observe the regulations for recording and reporting transactions. For this purpose, the purchase and sales books are relevant.
 
VAT returns are submitted for every tax period and they are based on the aforementioned books of account. Registered companies that have been engaged in supplies as an intermediary during an intra-EU supplies of services or goods, with the place of supply in another EU Member State, will need to submit the VIES return on the supplies for the relevant period (in addition to the VAT return). One of our attorneys in Bulgaria can provide more information on this issue.
 
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What are the conditions for tax refunds in Bulgaria?

 
Refunds are possible for the net input tax and the credit for the input tax is the amount that can be deducted from the tax liabilities under the VAT Law, linked with the economic activity. These are claimable within 30 days after the submission of the VAT return, when the taxable person has provided supplies liable for the zero tax rate during the 12 months before the current one during which the claim is made. In this case, the value of the zero rate supplies needs to have a total value of more than 30% of the value of the total taxable supplies (including the zero-rate ones). In some cases, the right to deduct credit for input tax cannot be claimed. This applies when the goods and services are used for business entertainment purposes, upon the purchase of a motorcycle of passenger car and in several other cases.
 
A different regime applies to taxable persons that qualify as agricultural producers. In this case, he must have produced taxable supplies within the prior 12 months at a rate of 20% of the goods. One of our immigration lawyers in Bulgaria can provide more details related to moving here.
 
The refund can also be granted to taxable persons that are not established in Bulgaria but are registered for VAT purposes in another EU Member State. On a basis of reciprocity, this is also possible in case of taxable individuals that are registered in a non-EU state. The Ministry of Finance is the one that establishes the documents that are required for the tax refund.
 
If you need information on VAT regulations in Bulgaria for 2024 , our lawyers can provide them to you. We also invite you to watch our video below:
 
 
 

VAT compliance in Bulgaria

 
The recording and processing of transactions in Bulgaria subject to VAT payments are governed by certain regulations. These include recommendations on:
 
  • requirements for Bulgarian invoices usage of the "reverse charge" process reporting of foreign exchange rates
  • what accounting records must be retained in order to make adjustments to errors from previous returns and provide credit notes (in fact, for non-resident VAT registrants no accounting records should be kept).
 
Businesses with a Bulgarian VAT number are required to submit recurring returns outlining all taxable sales and costs. Bulgarian VAT returns must be filed on a monthly basis. Periodic returns must be submitted no later than 14 days after the end of the month.
 
Should you need support in VAT registration in Bulgaria for a foreign company, we are at your service. If you are also interested in immigration to Bulgaria, you can rely on us for legal support in such matters.
 

Penalties in relation to the VAT Law in Bulgaria in 2024

 
Taxpayers who do not comply with the requirements for VAT registration in Bulgaria are liable to a fine. This is done according to Article 178 of the VAT Law and one of our lawyers in Bulgaria can provide more specific details about this Article and others that may be of interest regarding value-added tax and the general tax law. Below, we list some of the common sanctions:
 
  • the penalty for those who fail to register for VAT purposes starts at 500 BGN and cannot exceed 5,000 BGN.
  • those who fail to submit the VAT returns and the supporting documentation are subject to a penalty of 500 BGN or more, but no larger than 10,000 BGN,
  • companies or individuals who fail to submit the return for an intra-EU acquisition in due time are subject to a pecuniary penalty of 1,000 BGN but no larger than 10,000 BGN; repeated violations are subject to higher penalties, starting at 5,000 BGN but lo larger than 20,000 BGN.
 
Penalties also apply for failure to provide all of the required documents (thus leading to a smaller tax assessment) or for failure to properly submit the information from the ledgers on an indicates means of storage. 
 
Our law firm in Bulgaria can help taxpayers who need more information about the 2024 VAT Law and the manner in which violations thereof are treated. The penalty is issued, executed and can be appealed as per the Administrative Violations and Sanctions Law.
 
We can also complete and detailed information about other taxes in Bulgaria applicable both to Bulgarian nationals and to international supplies and import and export activities.
 

Recommendations for foreign companies operating in Bulgaria

 
The appointment of a fiscal representative is no longer necessary for EU non-resident enterprises who want to register for VAT in Bulgaria as of January 1, 2010. However, it is still advised to have a local agent who can represent the business and with whom the Bulgarian tax authorities can interact, conduct tax inspections, and review invoices and documents if necessary.
 
Non-EU companies are required to appoint a fiscal representative in Bulgaria. For this purpose, you can rely on our specialists.
 
We remind you that our lawyers in Bulgaria are at your disposal should you want to start a business in this country. Among our standard services also enter the VAT registration procedure, so you don’t have to complete such formalities separately. We can also act as representatives in the relationship with the Bulgarian Tax Administration.
 
For international business owners and corporations that create branch offices and subsidiaries here, the Bulgarian market is highly attractive. Although they must also abide by the laws established by the VAT Law, not all international businesses are compelled to register for this tax when they open offices here.

If you want to start a business in Bulgaria, the industry you plan to operate in will determine not only the kind of entity you should choose but also the requirements in terms of VAT registration. This is why it is best to use specialized accounting services when dealing with various activities. Feel free to address our law firm for guidance in setting up and registering your Bulgarian business.

 

VAT law changes starting with 2024

 
The following changes to the value added tax legislation will be mostly in force as of January 1st, 2024:
 
  • a system for postponing VAT payment in the event of centralized clearance upon goods importation was implemented while the importer needs specific authorization in order to apply the regime;
  • the outstanding VAT must be paid by the 16th of the following month from when the customs declaration was approved,
  • due to modifications to the initial input VAT deduction rules, there won't be a need for an adjustment in cases of proven or verified destruction that results in the irreversible disappearance of the products, or in cases of loss, absence, or destruction of goods caused by circumstances outside the control of taxable individuals;
  • in order to document supply made by taxable people who have not complied with their requirement to file for mandatory VAT registration within the allotted timeframe, new regulations have been implemented.
 
Contact our lawyers in Bulgaria for more details about VAT registration and requirements. You can also get in touch with us for information on immigration to Bulgaria.