Country Guide: Bulgaria
Looking to expand your e-commerce business to Bulgaria, then look no further, here is AVASK's guide to VAT in Bulgaria:
VAT in Bulgaria
Bulgaria is a member of the European Union (EU) and draws up its tax rules according to the laws or directives issued from Brussels by the EU. The current VAT directive applies to all 27 member states of the European Union, and it governs the rules on VAT compliance, and in some part, covers the setting of VAT rates.
As an EU member state, Bulgaria is obliged to implement the VAT directives, which provides guidance on VAT. Where there is a conflict, the European Union’s directive takes precedence. Bulgaria is not a member of the Eurozone and uses its own currency, the Bulgarian Lev (BGN). Bulgaria has changed its legislation to enable the country to join the Eurozone, which should see the country adopting the Euro around 2022/2023. In Bulgaria VAT is known as: Данък върху добавената стойност, or ДДС
VAT registration in Bulgaria
Both EU and non-EU businesses may trade in Bulgaria without establishing a local presence. This is known as non-resident VAT trading. There is no VAT threshold in Bulgaria for the registration of non-resident traders, but you will need one to record transactions and your Bulgarian customers will want proof that you have obtained one.
There are strict rules on the situations where VAT registration is permitted. Common scenarios that require Bulgarian VAT registration include:
- Importing goods into Bulgaria;
- Organising live events, conferences, etc. in Bulgaria;
- Holding goods in a warehouse in Bulgaria as stock for resale;
- Buying goods within Bulgaria that are subsequently re-sold in-country;
- Selling goods from Bulgaria to other EU member states;
- Distance-selling to private individuals in Bulgaria, e.g. internet retailing or trading through an e-commerce platform.
Registering for Bulgarian VAT generally takes two weeks once all documentation has been submitted to the tax authority, but this varies from seller to seller and will depend on the specifics of an individual company.
Bulgarian VAT compliance
There are detailed rules controlling the recording and processing of Bulgarian transactions for VAT purposes. This includes guidelines on:
- Bulgarian invoice requirements;
- When to issue a Bulgarian tax invoice;
- Foreign currency reporting;
- Credit notes and corrections;
- Correcting entries from prior returns;
- Which accounting records must be maintained.
Bulgarian VAT rates
|VAT Rate||% Rate|
Country Profile: Bulgaria
Bulgarian E-commerce Facts:
|Population||11 million (January 2020)|
|Currency:||Bulgarian Lev (BGN)|
|Number of e-commerce users:||4.3 million (January 2020)|
|Revenue in e-commerce market:||£595 million|
|Estimated market growth:||11.3% to £913 million by 2024|
Bulgarian thresholds and additional summary
|Distance Selling Threshold (DST)||BGN 70,000|
|VAT number format:||BG 123456789|
|VAT return period:||Monthly|
|VAT return deadline||14th day of the month following period end|
|Annual VAT filing deadline:||Not required|
|EC sales lists reporting||Monthly|