VAT reporting and refund
 

General information

The value added tax (VAT) is regulated by the Value Added Tax Act (VATA) and the Rules on the Application of the Value Added Tax Act (RAVATA), which implement in the Bulgarian legislation the rules of Directive 2006/112/ЕО on the common system of value added tax in the EU. The European VAT legislation may be found on the following website. VATA differentiates between taxable and exempt supplies of goods and services.

According to the Act the following supplies may give rise to an obligation to charge VAT:

  • Local supplies of goods or services;
  • Intra-community acquisitions of goods or services;
  • Import of goods.

Exempt supplies are stipulated in Chapter Four of VATA. Generally these include supplies related to healthcare, social care, education, sports or physical education, religion, supplies of non-profit nature, supplies of financial services, supplies of insurance services, gambling, supply of post stamps and postal services, as well as supplies of goods or services for which no right of tax credit was used.

As a rule 20% VAT is charged on all local supplies, intra-community acquisitions of goods, import of goods and services with a place of supply in Bulgaria. The Bulgarian VAT system envisages a reduced 9% rate only for hotel accommodation services.

 

How is VAT reported?

The obligations to report and pay VAT arise after registration under VATA. The registration may the choice of the person, as well as it may be performed ex-officio by the National Revenue Agency (NRA), if the grounds for such registration are in place. Additional information is available on the website of the NRA.

VATA registered persons are obliged to issue the documents required for each supply made or received by them.

The information from the documents mentioned above should be included in the purchases and sales ledgers, which the registered person should keep.

VATA registered persons are obliged to report the supplies of goods and services made and received by declaring and paying the VAT due to the state budget on a monthly basis.  VATA registered persons are obliged to file monthly VAT returns in a standard form. The return is filed only electronically via the NRA system, with the exception of cases set out in detail in the VATA. Additional information on the electronic filing of the VAT return is available at the following web address.

 

Term

The deadline for the filing of the return is the 14th day of the month, following the reporting period. The return is drawn up based on the information available in the ledgers and the documents issued in the respective month. The registered person is obliged to file the purchases and sales ledgers together with the return for the respective month. It is important to know that return should be filed even when the person has not made any supplies during the respective calendar month.

 

If the registered person has made intra-community supplies of goods or services with a place of supply in another EU member state, the person should file VIES-return, where these supplies are included. Additional information on the VIES return is available at the following web address.

As a rule, VAT should be paid by the supplier. However, the Act stipulates explicitly situations (art. 84  of VATA) where the recipient of the supply is obliged to charge the VAT and pay the tax themselves (in most cases in intra-community acquisition of goods or services).

 

Important to know
Important to know

It is important to know that payment of VAT should be made within the deadline for its declaration (by the 14th day of the month following the reporting period). Payment may only be made via bank transfer to the NRA accounts. In this respect you have to have in mind that the different territorial directorates of the NRA have different bank accounts, which are available on the website of the NRA. Furthermore, in the payment order companies should include a specific code for the specific tax due, as otherwise they risk paying other tax liabilities (if there are such outstanding and eligible).

 

When and how is VAT refunded?

VAT is subject to refund as a result of exercising the right to tax credit. The right to tax credit is the possibility to deduct the VAT paid for the supplies received by the person against the VAT due calculated on the basis of the taxable supplies made by the person.

The right to tax credit arises only when the supplies (inward receipts) for which the person has paid VAT are related to the economic activity carried out by that person and are intended for subsequent taxable supplies (outward sales). In most cases the right to deduct tax credit is rejected exactly due to the lack of these preconditions (for example, when the goods or services received are for personal use or exempt supplies).

VAT should be refunded when the total result after three consecutive reporting periods is VAT to be refunded. The amount of the VAT to be refunded is calculated as the positive difference between the amount of the VAT paid on the supplies received and the amount of the VAT due on the supplies made by the person within three consecutive reporting periods.

If the result in three consecutive reporting periods is VAT refundable, the revenue authority initiates a check.

As part of this check the revenue authority has the right to request additional information from the liable person (for example, copies of invoices, credit / debit notes thereto, written explanations, etc.). As a result of the check it is found whether the registered person has a valid  right to receive VAT refund.

 

For more information
For more information

In this respect it is important to know that, if there are liabilities related to outstanding public payables due by your company as at the time of the check, these liabilities will be offset against the VAT that is subject to refund.

 

The VAT refund is made to a bank account set out by the registered person. In most cases this occurs within the check initiated in relation to the VAT refund.

 

Important to know
Important to know

More information regarding the VAT reporting and refund is available on the website of the NRA.

Write to us
Ministry of Economy
8, Slavyanska Str., Sofia 1052, Bulgaria
BULSTAT: BG176789453
phone: +359 2 940 7001

fax: +359 2 987 2190
 
Operational Programme This item is available only in Bulgarian
Contacts: 8, Slavyanska Str. Sofia 1000, Bulgaria tel: +359 2 940 7001 e-mail: e-docs@mi.government.bg
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