LOCAL VAT MEASURES FOR FOREIGN COMPANIES IN BULGARIA
Do special arrangements apply to "call-off-stock" ?
No
No simplification measures are available for consignment stock or call-off stock. Foreign taxpayers are therefore required to be registered for VAT purposes in Bulgaria.
Call-off stock refers to the situation where at the time of transport of goods to another Member State, the supplier already knows the identity of the person acquiring the goods to whom they will be supplied at a later stage and after arrival of the goods in the Member State of destination. This currently gives rise to a deemed supply (in the Member State of departure of the goods) and a deemed intra-Community acquisition (in the Member State of arrival of the goods), followed by a 'domestic' supply in the Member State of arrival and requires the supplier to be identified for VAT purposes in that Member State.
Simplification measures have been implemented in various Member States avoiding the VAT registration of the supplier in the country of destination.
Triangulation can be applied when the middleman (B) is VAT registered for others supplies in the 3rd country (Member State of destination)?
No
Triangulation regime ABC cannot be applied when the middleman B is also VAT registered in Bulgaria [Member State of destination C] and/or in the Member State A [departure of the transport].
Triangulation can be applied when the chain transaction involves four or even more parties?
Yes
Triangulation scheme can be applicable in chain transaction involving four parties under conditions.
Chain transactions refer to successive supplies of goods which are subject to a single intra-Community transport. The intra-Community movement of the goods should only be ascribed to one of the supplies, and only that supply should benefit from the VAT exemption provided for the intra-Community supplies. The other supplies in the chain should be taxed and may require the VAT identification of the supplier in the Member State of supply.
However, the divergent approach amongst Member States in the application of these exemptions for cross-border transactions has created difficulties and legal uncertainty for businesses.
Optional reverse charge for supply of goods?
No
Reverse charge is not applicable to major supplies of goods [with the exception for supplies of goods with installation and for other specific items].
Optional reverse charge for supply of services
Yes
Reverse charge is applicable to all domestic supplies of services provided the recipient is a taxable person.
Optional reverse charge (art. 194 of the VAT Directive)
Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.
VAT Warehousing implemented in Bulgaria?
No
Bulgaria has not introduced VAT warehousing regime.
VAT Directive
Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.
Is it possible for a company to pay the import VAT via the periodical VAT return?
This information is available only on request.
VAT DIrective
Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return to be submitted.
VAT OBLIGATIONS IN BULGARIA
How is the tax period determined in Bulgaria?
Monthly
Your company has to report its VAT position by filing periodical VAT returns on a monthly basis (standard tax period). No other tax periods exist in Bulgaria.
When should periodical VAT return be filed?
Periodical VAT returns must be filed by electronic means to Bulgarian VAT authorities before the 14th day of the month (14 of N+1) following the tax period (month) to which it relates.
In order to access the electronic services of the tax authorities, the following requirements should be met: 1) the qualified electronic signature - required for accessing the electronic portal - should be issued by a Bulgarian licensed provider and 2) a request for accessing the electronic services of the NRA should be submitted.
VAT Directive
The tax period shall be set by each Member State at one month, two months or three months. Member States may, however, set different tax periods provided those ones do not exceed one year. The VAT return shall be submitted by a deadline to be determined by Member States. That deadline may not be more than two months after the end of each tax period.
Is this requirement laid down in the country and what is the filing deadline?
No
Your company is not required to file any summarizing annual VAT return in Bulgaria.
VAT Directive
Member State may require taxable persons to submit a return in respect to all transactions carried out in the preceding year. That return shall provide all the information necessary for any adjustments.
Are quarterly filings allowed by the country and what is the filing deadline?
The recapitulative statement [ESL] must be drawn up for each calendar month. ESL should be filed by electronic means or on paper format no later than the 14th day of the month after the end of the reporting period [month] to which it relates. Filing the statement on a quarterly basis is not possible in Bulgaria.
VAT Directive
The recapitulative statement shall be drawn up for each calendar month. However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency. The recapitulative statement shall be submitted within a period not exceeding one month.
What is the payment deadline?
The VAT due should be paid by the filing deadline for the VAT return - 14th day of the month after the tax period [month] to which it relates. Since 1/1/2014, a new regime of cash accounting is available under specific conditions.
Are interim payments required?
Interim payments are not required in Bulgaria
VAT Directive
Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. Member States may, however, set a different date for payment of that amount. Member States may require interim payment to be made.
Is any VAT credit automatically carried forward or refunded?
Refund of VAT credit is claimable within 30 days after submission of the VAT return where the person has effected supplies liable to tax at the zero rate within the last 12 months preceding the current month at a total value exceeding 30% of the total value of all taxable supplies. Otherwise, VAT credit is claimable within 30 days after submission of the most recent VAT return, when there is input VAT claimable after the application of the 2-month procedure and after setting off all other chargeable and unpaid tax liabilities and liabilities for social-insurance contributions collected by the National Revenue Agency, where the person owes such. Special deadlines exist [30 days] for investors in a large investment project.
VAT Directive
Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.
VAT OVERVIEW IN BULGARIA
What is the local name of the tax?
Danak varhu Dobawenata Stoinost [DDS]
What is the structure of the VAT number?
VAT numbers for non-resident taxpayers registered for VAT purposes in Bulgaria have 12 characters [BG + 10 digits].
VAT Directive
Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services. Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.
VAT rates
Bulgaria applies a standard VAT rate of 20% and one reduced rate of 9%.
Dispatches: BGN 280,000
Arrivals : BGN 460,000
BGN 70,000
see various thresholds applied in the EU
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