VAT registration and filing of VAT returns in Bulgaria

Compliance with VAT in Bulgaria

If you have a company registered in the EU and do business related to international trade and have sales to non-taxable persons (individuals B2C) in Bulgaria, you may be liable for VAT registration in Bulgaria. This affects you in particular if you are selling through your website or through a market place and you find yourself in the following situations:

• Distance selling;
• Dropshipping;
• Selling goods that have been previously transported to a warehouse of a market place, a fulfilment centre or a warehouse rented by you in Bulgaria, from where you send them to customers;
• Other less frequent cases may arise where registration obligations arise.

Intra-Community Distance selling

In cases where you sell to individuals in Bulgaria from your website or via a market place and you send the goods from the country where you are registered (EU member) to your customers in Bulgaria you are subject to VAT registration in Bulgaria after reaching sales of EUR 35,791. An application for VAT registration in Bulgaria should be submitted within one week before reaching that amount. Please note that time consuming documents are being prepared in connection with the submission of the VAT Registration Application.

Dropshipping

In connection with the amendment of the VAT Act in Bulgaria of 01.01.2020 in case of delivery with place of execution on the territory of the country, the foreign companies are subject to mandatory registration before their first sale. If you sell goods via your website or via a market place to individuals in Bulgaria and the goods are located with your supplier in Bulgaria, then the place of delivery is in Bulgaria and this gives rise to the corresponding VAT registration obligation for your company.

This is also the case if you sell in any other EU country and your Bulgarian supplier sends the goods directly to your customers in other EU countries. Under the VAT Act, you become the owner of the goods before they are handed over to the final customer, and accordingly you are obliged to register under the VAT Act in Bulgaria, as the goods depart from Bulgaria. Depending on the volume of your sales to other EU countries, VAT registration obligations may also arise in other countries for your distance sales.

Selling goods that have been previously transported to a warehouse in a market place, a fulfilment centre or a warehouse rented by you, from where you send them to customers.

If your activity relates to the sale of goods (which are your property) and are in a warehouse in Bulgaria in order to comply with the VAT requirements in Bulgaria you are obliged to register for VAT in Bulgaria before your first sale takes place. The requirement is new and relates to the synchronisation of the Bulgarian VAT Act with the European legislation /Directive 2006/112/EC/. In some cases, in addition to VAT registration, you must register a place of business in Bulgaria and therefore pay corporate tax for your profit realised in Bulgaria.

A VAT registration obligation may also arise for you if you carry out transactions with VAT registered persons in Bulgaria (B2B), Example:  You import goods from a third country (non-EU country) into Bulgaria and then sell them to Bulgaria or another EU country.

Another case where an obligation to register for VAT in Bulgaria arises is when you purchase a good from a VAT-registered person in Bulgaria (B2B), but do not transport it to the country from which you have a VAT number issued, but sell it directly from Bulgaria to your customer.

The VAT rate on sales of goods in Bulgaria is 20%

You should bear in mind that, in addition to VAT registration, you also have obligations related to Intrastat when reaching the specified parameters by flow of arrivals under Bulgarian legislation.

For registration and submission of VAT declarations in Bulgaria, as well as for information on prices of the services offered, contact us