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Key takeaways
- Bulgaria VAT rates: The standard VAT rate is 20%, with a 9% reduced rate for hotel stays and publications, and a 0% rate for intra-EU and international transport.
- Registration threshold: Resident businesses must register once turnover exceeds BGN 100,000, while non-EU sellers must appoint a fiscal representative.
- Filing & penalties: VAT returns are filed monthly, and late filings or payments can result in fines up to BGN 10,000 and 5% interest on unpaid VAT.
Expanding your business to Bulgaria requires a solid understanding of its VAT system. Like all EU countries, Bulgaria has its own set of VAT rules and regulations, and navigating these can be complex, especially for those unfamiliar with the Bulgarian tax system. In this guide we provide all the essential information about Bulgarian VAT, helping you understand how it affects your business operations in Bulgaria.
What is the Bulgaria VAT rate in Bulgaria?
In Bulgaria VAT (Value Added Tax) is known as Danŭk vŭrkhu dobavenata stoĭnost (DDS). If your business activities fall under certain criteria, you'll need to register for a Bulgaria VAT number and comply with local VAT regulations. The standard Bulgarian VAT rate is 20%, the reduced rate is 9%, and there is also a 0% rate.
Registering for VAT in Bulgaria
Resident businesses are required to register for VAT in Bulgaria if they exceed the turnover threshold of BGN 100,000 (nil for non-resident businesses) in any 12-month period.
If the annual turnover of your cross-border sales to Bulgaria exceeds the €10,00 threshold and you have not chosen to pay the VAT via the One Stop Shop, you must register for VAT in Bulgaria. Businesses storing products in Bulgaria or participating in an FBA (Fulfilled-by-Amazon) program that includes Bulgaria must also register for VAT.
Businesses can apply for their Bulgarian VAT number by downloading an application form from the Bulgarian National Revenue Agency website. Foreign companies should submit their application to their local tax office, whereas those engaged in distance selling are required to submit their registration form to the main office in Sofia. The process usually takes no more than a couple of weeks.
Fiscal representative in Bulgaria
Non-EU businesses conducting taxable transactions in Bulgaria are required to appoint a local fiscal representative. This representative is responsible for ensuring compliance with Bulgarian VAT obligations and is jointly liable for the VAT.
Bulgarian VAT return filing and penalties
All Bulgarian VAT returns are to be submitted monthly. VAT return submissions and VAT payments should be made electronically via the National Revenue Agency website. The deadline for filing VAT returns is the 14th day of the month following the reporting period.
Failing to meet the Bulgarian VAT filing and payment deadlines can result in penalties. Fines of BGN 500 to BGN 10,000 may be imposed for missed returns, while missed payments will incur interest of 5% on the amount outstanding.
Bulgarian Intrastat declarations
Intrastat declarations in Bulgaria are required for EU traders who reach a certain threshold in goods movement to or from other EU countries. The threshold for Intrastat declarations in Bulgaria is BGN 700,000 for arrivals and BGN 1 million for dispatches. Declarations are due by the 14th day of the month following the reporting period. Businesses failing to submit an Intrastat return could face fines of up to BGN 5,000.
Reverse charge in Bulgaria
The reverse charge mechanism in Bulgaria applies to certain goods and services, shifting the VAT liability from the supplier to the recipient. This mechanism is often used in transactions involving foreign businesses to simplify VAT reporting.
Frequently asked questions
What is the VAT rate in Bulgaria?
The standard Bulgarian VAT rate is 20%, with a reduced rate of 9% for hotel accommodation and newspapers. A 0% VAT rate applies to intra-EU supplies and international passenger transport.
When do I need to register for VAT in Bulgaria?
Resident businesses must register once their turnover exceeds BGN 100,000 in a 12-month period. Non-resident businesses have no threshold and must register immediately. The EU-wide distance selling threshold of €10,000 also applies.
How do I register for VAT in Bulgaria?
Businesses can apply via the Bulgarian National Revenue Agency (NRA) website. Non-resident and distance-selling businesses must submit applications to the main tax office in Sofia. The process typically takes around two weeks.
Do foreign businesses need a fiscal representative in Bulgaria?
Yes. Non-EU businesses must appoint a fiscal representative who is jointly liable for ensuring full VAT compliance in Bulgaria.
How often must VAT returns be filed in Bulgaria?
All businesses must file monthly VAT returns, submitted electronically via the NRA portal. Returns and payments are due by the 14th day of the following month.
Are Intrastat declarations required in Bulgaria?
Yes. Intrastat filings are mandatory for businesses exceeding BGN 700,000 for arrivals or BGN 1 million for dispatches, and are due by the 14th of the following month.
