Foreign Entities

For suppliers who are not residents, there’s no set threshold for registration. A non-resident, who is not established in Bulgaria, must register for Bulgarian VAT if they conduct taxable transactions where the supply location is within Bulgarian borders, provided the reverse charge doesn’t apply.

Taxable Persons

In Bulgaria, the term “taxable person” refers to any individual or entity that performs an independent economic activity, regardless of the objective or outcome of that activity. The definition of “any person” in this context is comprehensive and covers the following:

• Legal entities, including both private and public companies.
• Non-legal entities, such as cooperatives, joint ventures, and partnerships.

Mandatory Registration

According to Article 96 of the Bulgarian VAT Law, a person must register for VAT in the following cases:

• If their turnover within a consecutive 12-month period equals or exceeds the registration threshold, they must register within seven days of the expiration of the relevant tax period.
• If their turnover exceeds the threshold within a period of no more than two consecutive months, including the current month, they must register within seven days of reaching that turnover.
• If they supply goods for their own account that need to be assembled or installed in Bulgaria, and they are established in an EU Member State other than Bulgaria, they must register within seven days of the taxable event of the supply.
• If their distance sales and B2C services reach or exceed the distance selling threshold in the current or preceding calendar year, they must register no later than seven days before the VAT on the supply exceeding the threshold becomes due.
• If they make intra-Community acquisitions that equal or exceed the relevant threshold in any calendar year, they must file for VAT registration no later than seven days before the intra-Community acquisition that exceeds the threshold.
• If they receive reverse-chargeable cross-border services, regardless of turnover and whether they are local or foreign, they must register no later than seven days before the VAT on the supply becomes due.
• If they are an unincorporated company with a VAT-registered partner, they must file for registration within seven days of the date the company is formed or, if the partner registers after that date, within seven days of the partner’s registration date. Failure to register on time may result in financial penalties.

Voluntary Registration

A taxable person can voluntarily register for VAT at any time, even if they haven’t reached the turnover threshold or engaged in specific taxable transactions. This is often done in anticipation of future taxable transactions. Recently, legislative amendments have allowed for voluntary VAT registration at the time of entity incorporation through an application submitted to the Registry Agency. However, voluntary VAT registration cannot be terminated by the taxable person until 24 months have passed, starting from the beginning of the calendar year following the registration year.

Exemption

Individuals not fulfilling the mandatory registration prerequisites are not required to register for Bulgarian VAT. Therefore, any person operating in Bulgaria, making taxable supplies where the supply location is within Bulgaria and their turnover is below the registration threshold during any 12-month period, is exempt from registration.

In the same way, any person operating in Bulgaria and making taxable supplies from a location outside of Bulgaria is not required to register for VAT. However, if a supplier’s taxable turnover from transactions made within Bulgaria exceeds the registration threshold over a consecutive 12-month period, the supplier is obligated to register for VAT.

Registration Procedures

The National Revenue Agency (NRA) requires the submission of a VAT registration application, accompanied by certain documents providing evidence of the turnover, executed supplies, scope of the taxable entity’s operations, and any other required data. The application can be lodged in either a physical or digital format.

Typically, the VAT registration process is completed within 14 days following the submission of the application. Nevertheless, if the registration is pursued on special grounds other than achieving the necessary VAT registration threshold, the NRA has a span of three days to conclude the VAT registration process. This protocol ensures that the taxable entity is registered for VAT in Bulgaria from the date of the taxable event and that Bulgarian VAT is applied to supplies at the standard rate.

A specific VAT registration service can be utilized by foreign entities offering digital services, as well as domestic organizations acquiring goods and services due to the transfer of a going concern, reorganization, or as a non-cash contribution.

In Bulgaria, a taxable entity is deemed to be registered for VAT from the day it receives the Act for VAT registration. The NRA holds the power to register a taxable entity for VAT on its own accord if it determines that any of the conditions for compulsory VAT registration have been satisfied, but the taxable entity has not submitted the VAT registration form within the designated timeframe.

VAT Representative

The Bulgarian VAT Act allows a person established in another EU Member State to designate a fiscal representative to handle its VAT affairs in Bulgaria. However, a person established outside the EU must appoint a fiscal representative unless the foreign entity is established in a non-EU country or another EU Member State that has an agreement for legal assistance with Bulgaria under the same article.

The fiscal representative has a broader role than a regular fiscal agent, and once appointed, it is responsible for representing the foreign entity in all its tax legal dealings with the Bulgarian revenue authorities. The fiscal representative is jointly and severally liable for the client’s obligations under the VAT Law for up to five years after the appointment’s termination or until a new fiscal representative is designated.

If the fiscal representative is dissolved or rendered incapable of acting, the foreign entity that requires one must appoint a new fiscal representative within 14 days, or risk being deregistered for VAT in Bulgaria.

New Regulation July 2021

As of July 2021, new rules have been put into place. National-specific VAT thresholds were discarded in favor of a uniform distance selling threshold of EUR 10,000 across the EU. Any distance selling revenues that fall under this new limit are still liable for VAT in the country of origin or the business’s home country. All revenues exceeding this threshold are subjected to tax in the countries where the goods and services are being delivered.

Last Updated: 18/10/2023

Disclaimer

The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax