Value Added Tax – VAT compliance and rates in Bulgaria
According to the Bulgarian law, every person who is registered under Bulgarian Value Added Tax Act (VATA) is obliged to charge the value added tax. Moreover, this person should issue a tax document (invoice) and indicate the said document in the purchase day book for the relevant tax period under the issued declaration. The invoice should be issued in 5-days period after the chargeable event.
No tax is charged in the cases of effecting an exempt supply, an exempt intra-European Union acquisition, as well as in respect of any supply whereof the place of the transaction is outside the territory of Bulgaria.
What is the value added tax rate in Bulgaria?
Art. 66 VATA provides for the following tax rates:
A standard 20% rate, which applicable to taxable supplies, except for those expressly specified as subject to a zero rate; the importation of goods into the territory of the country; the taxable intra-European Union acquisitions.
The tax applicable to accommodation provided at hotels and similar establishments, including the provision of vacation accommodation and letting out of places for camping sites or caravan sites, is 9 %.
A zero tax rate shall be applicable to the explicitly provided for in the Law supplies.
Zero-rated supplies shall be:
- supplies of goods dispatched or transported to a destination outside the territory of European Union:
- international transport of passengers;
- international transport of goods;
- supplies linked to international transport;
- supplies linked to international goods traffic;
- supplies for the handling of goods;
- supplies of gold for central banks;
- supplies linked to duty-free trade;
- supplies of services provided by agents, brokers and other intermediaries linked to supply of the above mentioned zero-rated supplies;
- supplies by virtue of international treaties, agreements, accords, conventions or other such whereto the Republic of Bulgaria is a party, ratified and promulgated accordingly;
- supplies of goods and services where recipients are armed forces of other countries which are parties to the North Atlantic Treaty;
- supplies of services linked to importation, such as commissions, packing, transport, and insurance shall be a supply liable to tax at the zero rate where their value is included in the taxable amount]
- intra-European Union supplies, except the exempted ones, where a recipient is a taxable person or a non-taxable legal person which is not registered for VAT purposes in another Member State;
- intra-European Union supplies of new means of transport, including by natural persons.
In carrying out the taxable supply, the supplier is the taxpayer.
There are several exceptions to this rule:
- Where the supplier is a taxable person who is not established in the country and the supply has its place of performance within the country and is taxable, the tax is chargeable from the recipient for supplies listed in Art. 82 (1), items 1, 2 and 3 regarding the supply of gas, of goods which are mounted or installed, and of supplies of services.
- The tax is chargeable from the recipient for triangular operations.
- The tax is chargeable from the recipient who is a person registered under VATA for investment gold and gold material.
- The tax is chargeable from the recipient – the person registered under this Act, in the cases of Article 163a, regardless of whether the supplier is a tax liable person or not.
As a rule, import tax is chargeable from the importer.
The tax on intra-European Union acquisitions is due by the person carrying out the acquisition – Art. 84 VATA.
Charging of the tax
The VAT becomes chargeable on the date of the chargeable event and the registered person becomes obligated to charge the same, or grounds arise for an exemption for the exempt supplies and those supplies with a place of transaction outside the territory of the country.
In case of a full or partial advance payment on the supply is made, the tax becomes chargeable upon receipt of payment (for the payment amount), excluding payments received in connection with intra-European Union supplies.
VAT returns and payment
Monthly VAT returns are filed and the tax is due by the 14th of the following month. The VAT tax period is a calendar month.
European sales list (VIES) returns should be filed monthly by the same deadline if intra-community supplies of goods or certain services have been performed during the respective month.
EU registered entities which are not registered and established for VAT purposes in Bulgaria can receive a refund of the local input VAT incurred for goods and services used for supplies with a place of supply outside Bulgaria. A specific procedure with the authorities of the EU member state of registration has to be followed.
Non-EU registered entities may be entitled to a refund on a reciprocal basis (i.e., if their country of tax residence provides the right to VAT refund to Bulgarian entities). A specific procedure involving the Bulgarian revenue authorities must be followed.
Contact us in case you need additional information regarding the value added tax in Bulgaria.