Doing business in Bulgaria requires a thorough understanding of Value Added Tax (VAT). This comprehensive guide explains who needs to register for VAT, the process, and key requirements.
Who Needs to Register for VAT?
Any business established in Bulgaria and supplying taxable goods or services must register for VAT. Taxable supplies are defined in detail by the Bulgarian VAT Act. Upon registration, you'll receive a VAT identification number (VAT ID) starting with "BG."
Additional Registration Triggers
Businesses offering taxable supplies where the tax is due by the recipient also need to register.
Types of VAT Registration
VAT registration can be mandatory or voluntary. Mandatory registration is required under specific circumstances, while businesses below the threshold can choose to register voluntarily.
Mandatory VAT Registration Threshold
Until December 31st, 2024, businesses exceeding a taxable turnover of 100,000 BGN (approximately €51,100) within the last 12 months must register within 7 days. Effective January 1st, 2025, the mandatory registration threshold will increase to 166,000 BGN (approximately €85,000).
Taxable Turnover Calculation
Taxable turnover includes advance payments on taxable supplies and financial and insurance services (excluding advance payments on intra-community supplies).
Excluded from Taxable Turnover
Supplies with the place of supply in Bulgaria (telecommunications, radio & TV broadcasting, electronic services) performed by non-EU businesses or businesses registered in another EU member state without a permanent establishment in Bulgaria are excluded from taxable turnover.
Types of Mandatory VAT Registration
Mandatory registration is required for:
- Supply of goods with installation and assembly
- Services where the tax is due by the recipient
- Intra-community sales (telecom, radio & TV, goods) for companies established only in Bulgaria with the place of supply in another EU member state
- Intra-Community Acquisitions (ICA) exceeding 20,000 BGN for the current calendar year
Denial of Registration
The revenue authority may refuse registration if your previous registration was denied or terminated within 24 months.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
