VAT - value added tax in Bulgaria

The VAT/ value added tax in Bulgaria

Our services in the field of VAT include:

• Application for a value added tax identification number
• Submitting monthly VAT declarations in the Bulgarian National Revenue Agency (NRA)
• Application for refund of VAT
• Assistance with VAT audits by the NRA

According to the Bulgarian VAT Act the taxation rate amounts to 20% (apart from expressly enumerated types of goods and services, which are taxed at a rate of 9% and 0% VAT tax). Turnover tax-exempts exist for instance by the acquisition of old buildings, of agricultural and forest land and in the field of non-economic activities. A reduced rate is the one by the accounting of hotel accommodations.

For the needs of the VAT taxation a registration in the National Revenue Agency is required, which could be compulsory or voluntary. Pursuant to Article 96 of the Bulgarian VAT Act the registration is mandatory if the taxpayer has realized a turnover of at least 100,000 BGN in the last 12 months.  Subjects to the registration requirement are also persons who are engaged in the intra-community trade. The latter includes purchase of goods from an EU Member State, transported or sent to Bulgaria, the supplier being a taxable person registered for VAT purposes. VAT-exempt are suppliers with annual purchase rates up to 20,000 BGN.

On the other hand, persons who do not fall under the scope of the compulsory registration requirement are still able to request such registration. The VAT Act regulates the turnover in chapters 10 and 15, and provides for further prerequisites that make the sales tax registration obligatory.

Pursuant to the VAT Act the rate of the value added tax is as follows:

1. 20% on taxable goods and services, import and export of goods, as well as for the taxable goods within the EU;
2. 9% for accommodation provided by a hotel owner if it is in connection with an organized tour (tour operator services)
3. 0% for the enumerated in the VAT Act activities and services. These include:

• Deliveries of goods to third countries;
• International passenger service;
• International freight traffic;
• Deliveries in connection with the international market;
• Deliveries that are connected with the international exchange of goods;
• Deliveries in connection with the processing of goods;
• Gold deliveries to the central bank;
• Deliveries that are duty free;
• Services that are provided by agents, brokers and other financial intermediaries;
• Intra-Community deliveries of goods;
• The delivery of new vehicles within the EU;
• The supply of excise consumer goods within the EU;
• Deliveries by virtue of international treaties to which Bulgaria is a party;
• Delivery of goods and services, whose recipient are the armed forces of other NATO members;
• Deliveries of goods and services with recipient – the EU institutions.