Bulgaria VAT Guide

What is the tax called?

VAT Value Added Tax

What type of tax is it?

Consumption-based tax on consumers, on business transactions and imports

What is it due on?

Taxable turnover – VAT is added to the value of supplies of goods and services where the ‘place of supply’ is Bulgaria.

What are the VAT rates?

Taxable:
20% – default (standard) rate
9% – reduced rate
0% – zero rate

Exempt:
0% – Exemptions for specific services/goods

What is tax with 9 % – reduced rate e.g.
• tourist services;
• supplies of books, student books, newspapers and magazines;
• food supplies suitable for babies or toddlers, baby nappies and similar baby hygiene articles;

What is tax with 0% – zero rate e.g.
• export;
• international transport of passengers;
• international transport of goods;
• services related with international transport;
• delivery related with international traffic of goods;
• delivery by processing of goods which are subject of export;
• delivery of gold for central banks;
• delivery related to duty-free trade;
• delivery with a consignee managing an electronic interface;
• delivery of services provided by agents, brokers and other intermediaries when the services are related with some of the deliveries above;
• delivery related with import services when their amount is included in the taxable amount on which is applied VAT during the import of the goods;
• Intracommunity – dispatch;
• Intracommunity – acquisition with 0% VAT;
• zero rate on delivery of general travel service;
• delivery of goods under the special order of zero-rate margin taxation;
• Exempted supplies under international treaties and supplies for which the recipients are the armed forces of foreign countries or institutions of the European Union.
Exempt from VAT e.g.
• healthcare services;
• social care and social security services;
• services relate to education and sport by eligible bodies;
• deliveries related to culture;
• religion;
• donations;
• delivery with properties (subject to an Option to Tax for commercial properties and building land supplies);
• finance;
• Insurance;

What does a VAT number look like?

BG175402220

Is there a registration limit?

The BG business can register voluntarily or mandatory if it passes, the threshold of 51 129 Euro. From 2025 the threshold will be 84 875 Euro.

For non-BG established businesses there is no threshold.

When does a non-established entity need to register?

If it imports into or trades goods in BG, if IC acquisitions of goods into BG are done for more than 10 226 Euro, or if the place of supply of goods and services is deemed to be BG and the receiver is not obliged to self-charge VAT.

When is the place of supply Bulgaria?

A supply that takes place in BG.
Also, special rules for services, no matter where the supplier belongs, such as:
• land and property related;
• digital, telecommunications and broadcasting;
• services, including admissions, linked to physical performance, including artistic, cultural, educational, sporting, entertainment, exhibition and conferences/meetings;
• restaurant and catering;
• hire of means of transport;
• passenger and freight transport

Any special rules?

• Special regime for import of goods where the value doesn’t exceed 150 Euro.
• Special regime for cash reporting of VAT (not widely used)
• Special regimes “out of EU”, “in EU”, and “Distance selling of imported goods where the value is under 150 Euro”.

Does a non-established entity need a fiscal representative?

Businesses which are established outside of the EU can register for VAT in BG only via fiscal (accreditive) representative.
Businesses which are established in the EU can register for VAT in BG without a fiscal (accreditive) representative but if they want, they can a point such representative.

How often do VAT returns need to be submitted?

The tax period is the calendar month. The VAT declaration must be submitted by the 14th of the next month.
For the special regimes “out of EU” and “in EU” the tax period is quarterly. The VAT declaration must be submitted by the end of the month following the quarter.

Are penalties imposed for late registration?

Yes – the amount of unpaid tax or:
• 5% from the TAX if the VAT is declared within 6 months but not less than 205 Euro.
• 10% from the TAX if the VAT is declared within 18 months but not less than 410 Euro.

Are penalties imposed in other circumstances?

Yes – penalties are charged for:
• In case the receiver doesn`t apply self – charged of VAT the penalty is 5% from the TAX but not less than 26 Euro; If the VAT is declared in the month following the month in which the VAT must be declared the penalty is 2% from the TAX but not less than 13 euro.
If there are two identical violations within two years, the fine is doubled.

Can VAT incurred by foreign businesses be recovered?

For the EU businesses can recover VAT under a special procedure.
For non-EU businesses, it is possible for BG and other countries concerned to have reciprocal refund arrangements.

Can VAT be deducted?

VAT incurred on expenditure can be reclaimed where it is used in connection with ‘taxable’ sales, being at the standard rate of 20%, the reduced rate of 9% or the zero-rate of 0%. Also, for certain exempted supplies, such as exports and IC supplies, VAT incurred may be deducted; VAT on expenditure used in connection with exempt supplies (see VAT rates) cannot usually be reclaimed.

Do I need to issue an invoice?

Invoices must be raised except when supplying private persons. There are specific requirements for what is included on VAT invoices. The official language is Bulgarian but the invoice can have a translated copy. The taxable amount and the amount of VAT have to be shown in BGN.