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VAT

The Bulgarian VAT legislation is based on the EU VAT rules and Directive 2006/112/EC.

VAT rates

20% for domestic supplies, intra-community procurements and imports from non-EU countries

7% for accommodation provided by hotels as a part of a tourist package

Exemptions
With the right to deduct input VAT:

Intra-community supplies, export to non-EU countries, international transport of goods and passengers, certain supplies related to international transport, sale of duty free goods under certain conditions, certain transactions related to international trade, specific supplies under international treaties, etc.

Without the right to deduct input VAT

Transfer or rental of land or rights over land (except for regulated land and land adjacent to new buildings), transfer of old buildings or parts thereof, rental for residential purposes to individuals (an option to tax these transactions is available); financial and insurance services; gambling; certain services related to health, education, religion, culture, etc.; other specific supplies (e.g. imports of certain goods and up to a limit, etc.)

VAT registration
Entities have to register for VAT purposes if they have performed:

Transactions with a delivery location in Bulgaria for which the VAT should be charged by the supplier exceeding BGN 50,000 (approximately EUR 25,000) for any 12-month period.

Intra-community procurements exceeding BGN 20,000 (approximately EUR 10,000) during the calendar year.

Distant sales in Bulgaria exceeding BGN 70,000 (approximately EUR 35,000) during the calendar year.

Entities registered in an EU member state supplying machinery and equipment for installation in Bulgaria to customers non-registered for VAT purposes have to register regardless of their taxable turnover. Foreign entities receiving services with a place of supply in Bulgaria for which recipients have to self-accrue Bulgarian VAT have to register regardless of their taxable turnover.
Any entity may apply for voluntary VAT registration. However, if registered voluntarily, such entity will not be able to deregister for two years following the year of registration.

Fiscal representative
Foreign entities have to appoint a local fiscal representative in order to register for VAT purposes except when they have a registered branch in Bulgaria. This rule does not apply to EU entities.

Further Information

For more information on Bulgarian Taxes visit our Downloads page where you will find our Quick Reference Guide on Bulgarian Tax Framework.

The Bulgarian Comprehensive Tax Guide in English is now being compiled and authored and is coming soon. Pre-register now for a 25% discount.